You may never have heard of Certegy Check Services. But if you ever pay a merchant by check, it's one of the companies likely to be deciding whether your payment is accepted or declined - much like the better-known "Big Three" credit-reporting agencies - and trading in your personal and financial information. And the Federal Trade Commission said today that Cetergy repeatedly ignored requirements of the Fair Credit Reporting Act.
The FTC says Cetergy has agreed to pay $3.5 million to settle the charges at faced as a "nationwide specialty consumer reporting agency" - the second-largest such penalty it has ever imposed. It said Cetergy repeatedly "failed to follow reasonable procedures to assure maximum possible accuracy of consumers' report information. Among other things, Certegy failed to adequately track the handling and resolution of consumer disputes, resulting in its failure to promptly delete inaccurate or unverifiable information. This failure led to the retention and reporting of inaccurate consumer report information regarding consumers who may have been denied the ability to pay by check at the thousands of merchants who use Certegy's check authorization services."
The FTC alleges that Certegy didn’t live up to its obligation to reinvestigate information consumers disputed as inaccurate. According to the complaint, rather than conducting its own robust investigation, Certegy sat back and put an unreasonable onus on consumers, making them jump through hoops to do work the law assigns to the CRA. For example:
“If a consumer disputes that he has a returned check from a particular merchant, Certegy requires the consumer to contact the merchant himself to resolve the dispute.”
“When the decline is a result of an ‘invalid’ ID, Certegy requires that the consumer obtain and send driving records to Certegy to ‘prevent future declines.’”
“When the consumer disputes that the consumer’s bank refused to honor a check, rather than accepting a bank statement as proof of the bank’s payment, Certegy requires that the consumer obtain a letter from the bank, on bank letterhead, signed by a bank employee before it will resolve the dispute in the consumer’s favor.”
Speaking to consumers, Fair adds: