FTC Settles With Consumer Reporting Agency

The FTC announced that it entered into a settlement with a consumer reporting agency charged with improperly selling prescreened lists of consumers who were late on mortgage payments, in violation of the FTC Act and the Fair Credit Reporting Act. Specifically, the FTC alleged that the CRA: (1) sold the prescreened lists to a company that did not have a legally "permissible purpose" to obtain the prescreened lists; (2) did not have appropriate controls in place to determine whether a permissible purpose existed; and (3) failed to properly investigate once it learned that the company was violating the CRA's internal policies on prescreening. The FTC also brought charges against the company, alleging, among other things, that the company resold the lists to third parties who did not have a permissible purpose, and also failed to notify the CRA of the end users of the lists.