Smart Home Monitoring Company Pays $20 Million To Settle Allegations Of Consumer Credit Reports Misuse

Cozen O'Connor
Contact

Cozen O'Connor

  • The Federal Trade Commission (“FTC”) reached a settlement with smart home security and monitoring company Vivint Smart Homes Inc. (“Vivint”) to resolve allegations that it improperly obtained and misused consumer credit reports in violation of the FTC Act, the Fair Credit Reporting Act, and the Red Flag rule.
  • The complaint alleged, among other things, that Vivint sales representatives used the credit history of unrelated consumers in order to qualify potential customers for financing when the potential customers’ own credit history was not sufficient for such qualification. If the financing account subsequently went into default, Vivint allegedly would refer the innocent parties whose credit history was stolen to its debt buyer and subject them to debt collectors. The complaint further alleged that Vivint failed to implement an identity theft prevention program required by the Red Flag rule despite being a frequent user of credit reports, including making more than 130,000 credit report inquiries in a single month.
  • Under the terms of the stipulated order, Vivint will pay $20 million, of which $5 million will be used to compensate affected consumers and $15 million is a civil penalty. Vivint will also implement an employee training and monitoring program and an identity theft prevention program, among other things.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Cozen O'Connor | Attorney Advertising

Written by:

Cozen O'Connor
Contact
more
less

Cozen O'Connor on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.