A short history of FTC credit report actions from 2000, 2003, and 2004 against Equifax, Experian, TransUnion, Sprint, and AT&T:

Nation’s Big Three Consumer Reporting Agencies Agree To Pay $2.5 Million To Settle FTC Charges of Violating Fair Credit Reporting Act

On January 13, 2000 the three national consumer reporting agencies, Equifax Credit Information Services, Inc., (Equifax), Trans Union LLC (Trans Union), and Experian Information Solutions, Inc. (Experian), have agreed to a total of $2.5 million in payments as part of settlements negotiated by the Federal Trade Commission to resolve charges that they each violated provisions of the Fair Credit Reporting Act (FCRA) by failing to maintain a toll-free telephone number at which personnel are accessible to consumers during normal business hours. According to the FTC’s complaints, Equifax, Trans Union and Experian (collectively, consumer reporting agencies or CRAs) blocked millions of calls from consumers who wanted to discuss the contents and possible errors in their credit reports and kept some of those consumers on hold for unreasonably long periods of time. The proposed settlements with each CRA also would require that it meet specific performance standards to ensure that CRA personnel are accessible to consumers.

The FCRA is designed to promote accuracy, fairness and privacy of information in the files of every consumer reporting agency. To provide consumers the ability to more easily resolve inaccuracies in their credit reports quickly, Congress amended the FCRA — effective Sept. 30, 1997 — to require Experian, Equifax and Trans Union to provide consumers who receive a copy of their credit report with a toll-free telephone number at which personnel are accessible to consumers during normal business hours.

“The reality is that consumers never got the access to the consumer reporting agencies that the law guarantees,” said Jodie Bernstein, Director of the FTC’s Bureau of Consumer Protection. “These cases demonstrate in no uncertain terms that it’s time for Equifax, Experian and Trans Union to pick up the phone and meet their obligations to consumers.”Equifax is based in Atlanta, Georgia; Trans Union is based in Chicago, Illinois, and Experian (formerly, TRW) is an Ohio corporation, with its principal place of business in Orange, California. They are the largest consumer reporting agencies in the nation. According to the FTC’s complaints, while all three CRAs had established toll-free telephone numbers for consumers, they violated the accessibility requirement of Section 609(c)(1)(B) since the provision went into effect in September 1997 because a substantial number of consumers have been unable to access the CRAs’ personnel when calling the toll-free numbers during normal business hours.

The complaints against Trans Union and Experian allege that since September 1997 over a million calls to their toll-free numbers received a busy signal or a message indicating that the consumer must call back because all representatives are busy. The complaint against Equifax contains a similar allegation involving hundreds of thousands of calls by consumers to its toll-free numbers. Further, each complaint alleges that a number of callers to the CRAs’ toll-free numbers experienced an unreasonable hold time while waiting to speak with CRA personnel during normal business hours. Finally, the complaints against Equifax and Trans Union allege that each blocked certain incoming telephone calls based upon the location of the call, including, but not limited to, area code.

The proposed consent decrees contain specific injunctive provisions that ensure the three CRAs maintain toll-free telephone numbers with personnel accessible to consumers who receive a copy of their credit report. Each of the proposed settlements would require that the CRAs maintain a blocked call rate of no greater than 10 percent and an average hold time of no greater than three minutes and thirty seconds. To measure the CRAs’ compliance with these standards, the CRAs will be required to conduct regular audits in accordance with guidelines specified as part of the settlement. Further, the proposed consent decrees would require each of the CRAs to fully comply with Section 609(c)(1)(B) of the FCRA in the future.

Finally, Equifax has agreed to pay $500,000, and Experian and Trans Union both have agreed to pay $1 million, all pursuant to the Commission’s authority to collect civil penalties, as a monetary settlement of the charges.

The complaints and proposed settlements were filed in U.S. District Courts in Illinois, Georgia, and Texas earlier today by the Department of Justice on behalf of the FTC. The Commission vote to refer the matters to DOJ for filing was 4-0, with Commissioner Sheila F. Anthony recused.

NOTE: A consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.

Copies of the complaints and proposed settlements, as well as two consumer brochures, “Fair Credit Reporting” and “How to Dispute Credit Report Errors” are available from the FTC’s web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.

FTC Matter Nos.:
Equifax — 9923016;
Experian — 9923017;
Trans Union — 9923018

Civil Action Nos.:
Equifax — 1:00-CV-0087; U.S. District Court for the Northern District of Georgia, Atlanta Division; Trans Union — 00C 0235; U.S. District Court for the Northern District of Illinios, Eastern Division, in Chicago;
Experian — 3-00CV0056-L; U.S. District Court for the Northern District of Texas, Dallas Division.

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Equifax to Pay $250,000 to Settle Charges – FTC Alleges Blocked and Delayed Consumer Calls Violated Consent Decree

On July 30, 2003, Equifax Credit Information Services, Inc. (Equifax) will pay $250,000 to settle Federal Trade Commission charges that its blocked-call rate and hold times violated provisions of an FTC consent decree that settled a 2000 lawsuit for violations of the Fair Credit Reporting Act (FCRA). That lawsuit settled charges that Equifax did not have sufficient personnel available to answer the toll-free phone number provided on consumers’ credit reports.

The FCRA is designed to promote accuracy, fairness, and privacy of information in the files of every consumer reporting agency. To provide consumers with the ability to resolve more easily inaccuracies in their credit reports, in 1996 Congress amended the FCRA to require Equifax and the two other major credit bureaus, Trans Union LLC and Experian Information Solutions, to provide consumers who receive a copy of their credit report with a toll-free telephone number and access to credit bureau personnel during normal business hours.

In January 2000, the three credit bureaus paid a total of $2.5 million to settle charges that each violated this provision of the FCRA. According to the FTC’s complaints, the bureaus blocked calls from over a million consumers who wanted to discuss the contents of, and possible errors in, their credit reports, and kept others on hold for unreasonably long periods of time. To ensure that credit bureau personnel were accessible to consumers, the settlements required that the bureaus meet specific performance standards, including limiting the number of calls that the agencies could block and the amount of time consumers could be placed on hold.

Equifax failed to meet the specific performance standards in the consent decree for blocked calls and hold times for certain periods in 2001. The settlement announced today will require Equifax to pay an additional $250,000 for violating the original consent decree.

The Commission vote to accept the settlement was 5-0. It will be filed in U.S. District Court for the Northern District of Georgia, Atlanta Division, by the Department of Justice at the FTC’s request, and is subject to court approval.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the consent decree and the order modifying the consent decree are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1 877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. X000057)

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Sprint, AT&T to Pay Nearly $1.5 Million in Combined Penalties for Violations of Federal Credit Laws

Sprint Corporation and AT&T Corp. will pay $1.125 million and $365,000, respectively, to settle Federal Trade Commission charges that they failed to notify certain applicants for telephone service of their rights under federal credit laws. The FTC charges that Sprint used consumers’ credit reports to deny them telephone service, and that both AT&T and Sprint placed conditions or restrictions on consumers’ service, without disclosing information required by the Fair Credit Reporting Act (FCRA). The disclosures must include that consumers have the right to obtain a free copy of the credit report and to dispute errors in it.

According to the FTC, Sprint and AT&T obtain consumers’ credit reports to determine their eligibility for telephone service. In some cases, the companies deny service, require consumers to make an advance payment or deposit, or limit the charges they may incur if the credit review shows the consumer to be a credit risk. The FTC complaint alleges that all of these are “adverse actions” under the FCRA, triggering the companies’ obligation to provide the consumers with a notice disclosing: (1) the adverse action taken; (2) the name, address, and phone number of the credit bureau from which the consumer’s credit report was obtained; (3) that the credit bureau did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; (4) the consumer’s right to obtain a free copy of the consumer report within 60 days from the credit bureau; and (5) the consumer’s right to dispute with the credit bureau the accuracy of any information in his or her report.

The FTC alleges that AT&T and Sprint in many instances took adverse action, but failed to provide complete notices (or, in the case of Sprint, in some cases failed to provide any notice) in violation of the FCRA. The incomplete notices allegedly failed to tell consumers, among other things, of their rights to a free credit report and to dispute the accuracy of information in it. The FTC also alleges that Sprint violated the Equal Credit Opportunity Act (ECOA) by failing to provide the notices mandated by that statute or by omitting certain required information in their notices.

The consent decrees order Sprint to pay $1,125,000 in civil penalties and AT&T to pay $365,000. The decrees bar the companies from future violations of the adverse action notice requirements of the FCRA and, in the Sprint decree, the ECOA. Both consent decrees contain standard recordkeeping procedures to assist the FTC in monitoring the companies’ compliance.

The FTC’s complaint against Sprint names as defendants Sprint Corporation, Sprint Communications Company L.P., and Sprint’s 19 subsidiaries that provide local telephone service in 18 states. The Sprint complaint was filed at the FTC’s request by the Department of Justice in the U.S. District Court for the Northern District of Florida, Tallahassee Division, on
September 9, 2004, and the AT&T complaint was filed on the same date in the U.S. District Court for the District of New Jersey, Newark Division.

The Commission vote to refer the complaints and proposed consent decrees to the Department of Justice for filing was 5-0.

NOTE: These consent decrees are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A consent decree is subject to court approval and has the force of law when signed by the judge.

Copies of the complaints and consent decrees are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 022-3159 – AT&T)
(FTC File No. 022-3160 – Sprint)

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