The FTC recently finalized an order against a leading provider of business credit report services, alleged to have deceived business regarding the value of products offered and failing to correct errors on customers’ credit reports.
The FTC first announced the complaint and proposed settlement order in January 2022, as discussed in our previous blog post. Under the finalized order, the company will be required to refund those businesses harmed by its deceptive and unfair practices outlined in the complaint. It will also make significant changes designed to benefit small businesses, including:
- Deleting incorrect information from credit reports upon being informed of an error, or initiating a reinvestigation of the information to confirm accuracy while ensuring that inaccurate information will not be readded at a later date;
- Investigating and correcting errors on credit reports within prompt and specific time periods;
- Informing businesses of the results of investigations into accuracy of information and providing those customers with free access to the revised information;
- Making clear disclosures to purchasers of credit-improving products regarding the company’s limited acceptance of requests to add payment history information; and
- Complying with FTC limitations on the ability to renew subscriptions to credit-building products, including ceasing the practice of using automatic renewals to switch subscribers of credit-building products to more expensive products.
Putting it Into Practice: The final order in this matter is noteworthy because of the remedies. In imposing obligations regarding its processes for the investigations and resolutions of disputed information on customers’ credit reports, the FTC is imposing relief more often found in cases brought under the Fair Credit Reporting Act (FCRA). The FCRA is a statute designed to protect individual consumers, not businesses, and is inapplicable in this case because the company deals in business credit reports, not personal credit reports. The more creative imposition of obligations under the FTC Act is a notable development, and is strongly indicative of the FTC’s continued focus on protecting not only individuals, but businesses from deceptive practices.