Security firm to pay $20M to settle FTC charges


A home security and surveillance company has agreed to pay $ 20 million to pay the Federal Trade Commission fees it misused credit reports to help unqualified customers fund the company's products and services the agency announced on Thursday.

The FTC said Vivint Smart Homes Inc., based in Provo, Utah, agreed to pay a civil penalty of $ 15 million and an additional $ 5 million to compensate injured customers.

The company said in a statement it had changed its practices.

The FTC accused Vivint of violating the Fair Credit Reporting Act by not properly receiving credit reports to qualify potential customers to fund their smart home surveillance and security products.

It also violated the FTC's "red flags" rule by not implementing an identity theft prevention program required by certain companies that regularly use or receive credit reports.

The FTC announced that some of Vivint's sales reps, who work door-to-door on a commission-only basis, used a process known as "white paging," where another consumer with the same or a similar name on the White Pages app was found using this consumer's credit history to qualify potential unqualified customers.

Sales representatives also sometimes asked customers the name of someone with a better credit rating, e.g. B. a relative, and then added that party to the account as a co-signer without their permission.

If those customers later defaulted on their loans, Vivint referred them to that debt buyer and subject them to debt collection agencies, the FTC said.

The FTC said Vivint fired many salespeople for misconduct, only to reinstate some of them shortly afterwards.

Among other things, the settlement stipulates that Vivint will carry out an employee monitoring and training program.

The company said in a statement, “We are pleased to have resolved this matter related to certain historical practices.

“We took steps before the FTC began its review to strengthen our compliance policies and we will continue to focus on this.

"We are determined to work with integrity and provide exceptional service to our customers."


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https://businessservicesnews.ca/security-firm-to-pay-20m-to-settle-ftc-charges/

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