The Federal Trade Commission has given the credit reporting industry a major wake-up call.
Earlier this month, the FTC settled with Certegy Check Services, one of the biggest check certification services in the United States. Certegy, facing charges of violating the Fair Credit Reporting Act (FCRA), agreed to pay a fine of $3.5 million and to improve the way it resolves disputes with consumers. As a consumer-reporting agency, Certegy also provides information to other, similar agencies.
Back in April, Certegy drew the wrath of one Bangor-area consumer, who submitted a check at a major grocery chain. The check went through Certegy’s computerized scan and was rejected; our consumer was unhappily surprised, since she had plenty of money in her account to cover the check.
She was given a printed instruction sheet from Certegy and, upon phoning the company, was bounced around their telephone tree for some time. Finally, she was asked to provide some personal information; she declined and she and her husband headed for their bank.
A helpful bank executive got a Certegy representative on the phone and determined the problem had started a week earlier. The woman had written a check to a local store in a major retail chain which also used Certegy. Her driver’s license number had been recorded incorrectly and, when the check was scanned, the computer declared that her’s was an invalid account. The error was not our consumer’s, but the Certegy rep said the woman’s ability to write checks could not be restored for several business days.
All of this made our consumer quite unhappy, since she regularly used checks to pay for her medications. We suggested she relate the events to Maine’s Bureau of Consumer Credit Protection, who heard a kinder, gentler story from Certegy.
Certainly the company did not mean to cause any hardship, and in cases of hardship, steps could be taken to restore check writing privileges immediately. No, they weren’t trying to pry by asking for personal information, just offering to enroll the consumer in “Certegy VIP.” Enrollment, the company said, might help avoid future check refusals.
Many consumers had to do their own investigative work to restore check privileges, and that did not make the FTC happy. It charged Certegy with violating provisions of the Furnisher Rule, which took effect in 2010. The rule said information provided to credit bureaus should be accurate and that consumers can take their challenges straight to the data furnishers.
Certegy did not admit any wrongdoing but promised in the agreement to do better. It issued this statement following the FTC’s Aug. 15 announcement:
“The Federal Trade Commission fine levied against Certegy Check Services was in response to the FTC’s allegation that some customer care processes did not comply with the Fair Credit Reporting Act. Consumer satisfaction is at the very core of Certegy’s business. We are committed to continuing to bolster our internal processes and have addressed all items identified by the FTC in order to ensure full compliance and to achieve consistent outstanding customer service.”
Just in case it missed a spot, Certegy has 180 days to get those internal processes humming. A judge needs to sign off on the agreement, under which Certegy also must give the FTC copies of consumer complaints for the next 10 years.
David Leach of Maine’s Bureau of Consumer Credit Protection said until now Certegy didn’t have a plan for investigating errors “and instead foisted too much of that responsibility onto the consumer.”
Leach said the settlement “sends a message to companies like Certegy that provide consumer data to insure they are following correct dispute procedures internally for consumer.”
For a rundown of your rights under the Fair Credit Reporting Act, visit www.creditcards.com and search for FCRA. Find out more about Maine’s Bureau of Consumer Credit Protection at www.credit.maine.gov or call 1-800-332-8529.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s all-volunteer, nonprofit consumer organization. For assistance with consumer-related issues, including consumer fraud and identity theft, or for information, write Consumer Forum, P.O. Box 486, Brewer 04412, visit http://necontact.wordpress.com or email firstname.lastname@example.org.