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Equifax Settles Claim It Wrongfully Sold Homeowner Data

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Between early 2008 and early 2010, one of the best-known names in credit reporting sold data on certain delinquent homeowners to third parties, and that information was then re-sold. However, two of the companies involved have now settled cases with the FTC over the actions.

The Federal Trade Commission recently reached settlement agreements with both the credit reporting firm Equifax and a company known as Direct Lending Source over charges that they violated both the FTC Act and the Fair Credit Reporting Act for a period of nearly three years, according to a report from the government agency. In all, Direct Lending Source will pay a $1.2 million civil penalty, while Equifax was hit with a fine of $393,000.

The charges stemmed from actions related to Equifax compiling and selling what are known as prescreened lists of consumers who had fallen behind on their home loan payments, the report said. Between 2008 and 2010, Equifax sold Direct Lending and its affiliate companies lists of people who matched specific criteria, and those lists contained a wealth of sensitive data about the consumers in question. This included their credit scores and whether they were 30, 60, or 90 days behind on their home loan bills.

Direct Lending’s fine is considerably larger than Equifax’s because in some cases it then re-sold the lists it bought from the credit bureau to third parties that then pursued those consumers for a number of products and services, the report said. These included loan modification and debt relief products that may have required down payments from those who signed up.

The terms of the settlement include both companies having to be more careful about the ways in which they sell data, and to which companies they provide this information, the report said. In particular, both will not be allowed to sell prescreened lists of consumers to companies that they believe do not have a permissible purpose to use them.

The last few years have seen the federal government crack down on the ways in which companies handle sensitive consumer data, and information that can have a negative impact on their financial or credit standings. This includes actions by not only the FTC, but also the Consumer Financial Protection Bureau, and other agencies.

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