Check Cashing Service Pays $3.5 Million in FTC Case

One of the nation's largest check cashing authorization services has agreed to pay $3.5 million to settle charges by the Federal Trade Commission that it violated the Fair Credit Reporting Act. Part of a broader FTC initiative targeting data brokers, the FTC's case against Certegy Check Services Inc. was simultaneously filed and settled today in U.S. District Court for the District of Columbia. It's the FTC's second-biggest penalty ever in a Fair Credit reporting case. The FTC alleged that Certegy did not follow proper dispute procedures and "failed to follow reasonable procedures to assure maximum possible accuracy of the information it provided to its merchant clients." The company, which is owned by publicly traded Fidelity National Information Services Inc., compiles people's personal information and uses it to help retailers decide whether to accept a customer's personal check. "Inaccurate information in a consumer reporting agency's file can have a huge impact on a person's everyday life, starting with their check being denied at the grocery store," said Jessica Rich, director of FTC's Bureau of Consumer Protection, in a news release. "In this case, we alleged that Certegy delivered a one-two punch: the company not only failed to assure that the information it provided to retailers was accurate, but it also failed to follow proper dispute procedures." According to the complaint, Certegy "failed to adequately track the handling and resolution of consumer disputes, resulting in its failure to promptly delete inaccurate or unverifiable information." The company also allegedly failed to create a streamlined process for consumers to obtain free annual reports. In addition to the fine, the company must improve its internal procedures. Ann Entwistle, a trial attorney in the Justice Department's Office of Consumer Protection Litigation, represented the FTC. The settlement agreement was also signed by FTC lawyers Maneesha Mithal, Robert Schosinski, Katherine Armstrong, Kevin Moriarty and Kristen Anderson. Covington & Burling partner D. Jean Veta represented Certegy.

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