Connect with us

Hi, what are you looking for?

The American GeniusThe American Genius

Business News

Equifax to forfeit profits from selling late borrowers’ sensitive information

The Federal Trade Commission has settled with Equifax for their selling lists of late borrowers’ information, and failing to act when that information was resold over and over by third parties for general marketing purposes, which is illegal.

equifax

equifax

Big problem for major credit bureau

The Federal Trade Commission (FTC) has announced a settlement with credit bureau, Equifax over allegations that the company sold mortgage borrowers’ information to Direct Lending when late on payments, then failed to take action when they became aware that Direct Lending was turning around and reselling the information elsewhere. 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).

Between 2008 and 2010, Equifax is said to have sold over 17,000 separate lists containing borrowers’ personal information like credit scores, contact information, and how delinquent they had become on their mortgage. The FTC reports this pertains to millions of U.S. consumers during this period but has not released an exact number of those impacted.

Under the FCRA, it is illegal for the consumer reporting agency to share consumer information, and illegal to obtain a pre-screened list from a consumer reporting agency unless it is to make offers of credit or insurance that will be honored if consumers meet pre-selected criteria. The FTC says that Direct Lending was buying the lists and reselling them for general marketing purposes, which is strictly forbidden.

According to the FTC, companies that purchased lists from Direct Lending have been the subject of law enforcement investigations.

Advertisement. Scroll to continue reading.

Settling for $1.6 million

As part of a settlement with the FTC, Equifax will pay $393,000 and is barred from furnishing pre-screened lists to any entity that it does not have reason to believe has a legal purpose to receive them, and will be barred from selling pre-screened lists in connection with offers for debt relief products or services and mortgage assistance relief products or services, when advance fees are charged, with limited exceptions.

In a separate action announced simultaneously, Direct Lending will pay a $1.2 million civil penalty, and barred from using or selling pre-screened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services.

Consumers have come to fear that a late payment on their mortgage will get credit reporting agencies’ attention and have an impact on their score, but due to it being illegal, it was surely surprising to some that they were inundated by questionable debt relief offers they had not pre-qualified for.

Advertisement. Scroll to continue reading.
Written By

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

1 Comment

Leave a Reply

Your email address will not be published.

The
American Genius
news neatly in your inbox

Subscribe to our mailing list for news sent straight to your email inbox.

Advertisement

KEEP READING!

Business Finance

The Federal Trade Commission has Credit Karma under fire for offering false pre-approval claims to customers.

Business News

(BUSINESS NEWS) Facebook is trying to avoid a fight with the government over Whatsapp and Instagram, but their leaked defense isn't that solid.

Business News

(BUSINESS NEWS) Following other antitrust hearings, we're expecting to hear more about the FTC's antitrust lawsuit against Facebook, soon.

Business News

(BUSINESS NEWS) Equifax's gigantic breach was, no doubt, terrible. But even worse was that the data company had been warned about the vulnerability.

The American Genius is a strong news voice in the entrepreneur and tech world, offering meaningful, concise insight into emerging technologies, the digital economy, best practices, and a shifting business culture. We refuse to publish fluff, and our readers rely on us for inspiring action. Copyright © 2005-2022, The American Genius, LLC.