Penalty Amount
$5,800,000
The FTC settled with background report providers TruthFinder and Instant Checkmate, charging they deceived consumers about the accuracy of their reports (often mischaracterizing traffic tickets as criminal records) and violated the Fair Credit Reporting Act (FCRA) by operating as consumer reporting agencies without following its requirements, including ensuring accuracy and limiting permissible purposes. The companies will pay a $5.8 million penalty and implement a comprehensive FCRA compliance monitoring program.
Under the proposed order, TruthFinder and Instant Checkmate must pay a $5.8 million penalty. They are permanently prohibited from misrepresenting report accuracy and from failing to comply with the FCRA when operating as consumer reporting agencies. They must establish a comprehensive monitoring program to ensure FCRA compliance, mandate that endorsers disclose material connections, and monitor such endorsers.
In-house legal teams should review vendor agreements with background report providers to ensure clauses mandate strict FCRA compliance, accuracy certifications, and permissible use restrictions. For organizations acting as consumer reporting agencies, customer agreements must incorporate FCRA-required disclosures, accuracy guarantees, and audit rights. Key clauses to examine include data accuracy representations, compliance warranties, indemnification for FCRA violations, and limitations on use for employment or tenant screening. Recommended changes may involve adding FCRA compliance addendums, requiring regular accuracy audits, implementing robust data source verification protocols, and clarifying permissible purpose definitions to avoid misuse.
Entity
TruthFinder; Instant Checkmate
Industry
Data BrokerOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2023/09/ftc-says-truthfinder-instant-checkmate-deceived-users-about-background-report-accuracy-violated-fcra
truthfinder complaint
https://www.ftc.gov/system/files/ftc_gov/pdf/truthfinder_complaint.pdf
truthfinder proposed order
https://www.ftc.gov/system/files/ftc_gov/pdf/truthfinder_proposed_order.pdf
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"TruthFinder and Instant Checkmate"
"pay a $5.8 million penalty"
"deceived consumers about whether consumers had criminal records and that the companies violated the Fair Credit Reporting Act (FCRA) by operating as consumer reporting agencies while, among other things, failing to ensure the maximum possible accuracy of their consumer reports"
"failed to investigate and respond to consumer complaints about inaccuracies in their reports, as required by the FCRA"
"marketing and sold those reports for employment and tenant screening purposes"
"Fair Credit Reporting Act (FCRA)"
$750K
The FTC finalized an order against Vanilla Chip LLC (doing business as TruHeight) and its principals for deceptively advertising height-enhancing supplements for children and teens without scientific evidence. The company also used fake reviews and incentivized 5-star ratings. The order requires a $750,000 payment and prohibits false health claims and deceptive review practices.
$2.3M
The FTC alleged that RentGrow, a tenant screening company, violated the Fair Credit Reporting Act (FCRA) by failing to use reasonable procedures to ensure the accuracy of its reports, including by reporting duplicate records and failing to disclose data sources. RentGrow agreed to pay a $2.25 million penalty and is prohibited from further FCRA violations and from misrepresenting dispute outcomes.
The FTC and New York Attorney General took action against Handy Technologies for deceptive earnings claims and failure to disclose fees and fines that led to millions of dollars being withheld from workers' wages. The FTC is sending over $2.7 million in refunds to 62,893 affected consumers.
$35.0M
The FTC alleged that Hopper, a travel booking app, charged consumers hidden and pre-selected fees (Tip and VIP Support) without their consent, misrepresented the benefits of VIP Support and Price Freeze services, and failed to clearly disclose total prices. Hopper agreed to pay $35 million for consumer redress and is prohibited from misrepresenting fees under a proposed order.
$1.5M
The FTC finalized a settlement with Publishing.com LLC and its principals for misleading consumers about potential earnings from self-publishing products. The company will pay $1.5 million and is prohibited from making unsubstantiated earnings claims, failing to disclose refund terms, and misrepresenting endorsements and reviews.
The FTC is seeking public comment on a proposed policy statement addressing concerns that AI companies may be manipulating AI system outputs contrary to consumer expectations for objectivity and accuracy. The statement explains that such conduct could be considered deceptive under Section 5 of the FTC Act. The public comment period runs until July 31, 2026.