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    FTC Settles With Equifax Over Charges of Improperly Selling Individuals’ Mortgage Data

    The Federal Trade Commission announced that it has settled with credit-reporting agency Equifax over charges of improperly selling the mortgage data of individuals:

    One of the largest U.S. consumer reporting agencies, Equifax Information Services LLC, has agreed to settle Federal Trade Commission charges that it improperly sold lists of consumers who were late on their mortgage payments.  In two separate actions, both Equifax and the companies that allegedly bought and resold the information from it will pay a total of nearly $1.6 million to resolve charges that they violated the FTC Act and the Fair Credit Reporting Act (FCRA).

    The two settlements are part of the FTC’s ongoing efforts to protect consumers in financial distress and to protect consumer privacy.  Equifax will pay $393,000to resolve allegations that its inadequate procedures led to the sale of lists of consumer information to firms that should not have received them.  According to the FTC, Equifax sold more than 17,000 prescreened lists of consumers to companies including Direct Lending Source, Inc., which subsequently resold some lists to third parties, who used their data to pitch loan modification and debt relief services to people in financial distress.

    As part of a separate settlement, Direct Lending Source will pay a $1.2 million civil penalty,and will be barred from using or selling prescreened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services. […]

    The FTC alleged that Equifax’s failure to employ appropriate measures to control access to sensitive consumer information was unfair, in violation of Section 5 of the FTC Act.

    Direct Lending and its affiliates and principals allegedly violated the FTC Act and the FCRA by:  1) obtaining prescreened lists without having a permissible purpose; 2) reselling the reports without disclosing to the consumer reporting agency that provided them who the end users would be; 3) failing to maintain reasonable procedures to ensure that prospective users had a permissible purpose to get them; 4) to the extent that firm offers of credit were made, failing to maintain a record of the criteria used to select consumers for these offers; and 5) failing to employ appropriate measures to control access to sensitive consumer financial information. […]

    Interested parties can submit written comments on the proposed Equifax settlement order electronically or in paper form by following the instructions in the “Invitation To Comment” part of the “Supplementary Information” section.

    Comments can be submitted electronically by clicking here.   Comments in paper form should be mailed or delivered to:  Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580.  The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

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