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FTC Sues MyLife.com for Deceptive Background Reports and FCRA Violations

MyLife.com, Inc.July 27, 2020Federal Trade Commission

Summary

The FTC filed a complaint against MyLife.com, Inc. and its CEO for deceiving consumers with 'teaser background reports' that falsely claimed to include criminal and arrest records, and for violating the Fair Credit Reporting Act by failing to ensure accuracy and permissible purpose. The company also engaged in misleading billing practices under the Restore Online Shoppers’ Confidence Act and Telemarketing Sales Rule.

Contract Impact

In-house legal teams should review all agreements where MyLife.com acts as a data provider or consumer reporting agency. Focus on vendor agreements with data sources to ensure they include robust accuracy and update obligations, and customer/subscriber agreements for compliance with the Fair Credit Reporting Act (FCRA). Key clauses to scrutinize are those defining 'consumer report,' establishing permissible purpose certifications, detailing accuracy procedures, and governing data sourcing. For billing practices under ROSCA and the Telemarketing Sales Rule, review auto-renewal terms, negative option marketing disclosures, and cancellation mechanisms. Required changes may include: (1) amending customer agreements to clearly disclose that 'teaser' reports may not contain the claimed criminal/arrest records, (2) strengthening FCRA compliance clauses with explicit accuracy and dispute resolution protocols, and (3) revising billing terms to provide clear, conspicuous disclosures of auto-renewal terms and easy cancellation methods.

Contract Search Terms

consumer report definitionpermissible purpose certificationaccuracy proceduresauto-renewal disclosurenegative option marketingdata sourcing agreementsdisclosure of report limitationsaudit rights

Laws Cited

Fair Credit Reporting ActRestore Online Shoppers’ Confidence ActTelemarketing Sales Rule

Violation Types

Entity Details

Entity

MyLife.com, Inc.

Also known as: MyLife.com

Industry

Data Broker

Official Sources

Source Evidence

Entity Name
"MyLife.com, Inc."
Laws Cited
"Fair Credit Reporting Act (FCRA)"
Laws Cited
"Restore Online Shoppers’ Confidence Act"
Laws Cited
"Telemarketing Sales Rule"
Violation Types
"failing to maintain reasonable procedures to verify how its reports would be used, to ensure the information was accurate, and to make sure that the information it sold would be used only for legally permissible purposes."

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The FTC and DOJ settled with MyLife.com, Inc. and its CEO for deceiving consumers with misleading background reports that falsely implied criminal records and for engaging in difficult-to-cancel subscription practices. MyLife violated the Fair Credit Reporting Act, Restore Online Shoppers’ Confidence Act, and Telemarketing Sales Rule. The settlement includes a permanent ban on negative option marketing, $33.9 million in judgments for consumer refunds, and a monitoring program.

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