Company didn't play by rules


That was the message when Florida-based Certegy Check Services, one of the nation's largest check authorization service companies, agreed to pay $3.5 million to settle FTC charges that it violated the Fair Credit Reporting Act.

Certegy is considered a consumer-reporting agency and, as such, it helps businesses determine if they will accept a customer's check based in part on information in its files about the person's check-writing history. Certegy also furnishes information to other credit-reporting agencies.

Federal law says that if the information the company provides results in a check being denied, the consumer has the right to dispute the information used for the denial. The data supplier has to take a number of steps to determine what's right, including investigating the dispute within a reasonable time and correcting inaccurate information.

The FTC has been scrutinizing the practices of data brokers to see if they are following proper dispute resolution measures. The agency said Certegy failed to assure that the information it provided to retailers was accurate and didn't follow proper dispute procedures. It also said that the company failed to create a streamlined process so consumers could receive the free annual reports that they are entitled to under the FCRA and didn't have reasonable written policies and procedures ensuring the accuracy of information it provided to other credit-reporting agencies. The actions against Certegy are the first alleging violations of the so-called Furnisher Rule, which went into effect in 2010. That rule was established to ensure the accuracy and integrity of information provided to credit bureaus and to allow consumers to take challenges directly to the furnishers of the information.

The FTC also said in its complaint that Certegy shifted the burden to customers to conduct an investigation of their claim "rather than fulfilling its legal obligation to reinvestigate disputed information." It's worth noting what caught the ire of the FTC. Specifically, the agency said if a consumer argued that he didn't have a returned check from a particular merchant, Certegy required the person to contact the merchant himself to resolve the dispute.




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