FTC settles complaints against credit report resellers

Lax cybersecurity practices led to credit report breaches at the companies, the FTC alleges

The U.S. Federal Trade Commission has approved proposed settlements of complaints against three credit report resellers after the agency accused them of lax cybersecurity practices that led to compromised credit reports.

The settlements, announced Thursday, require the credit report resellers to put comprehensive cybersecurity programs in place and to obtain independent audits of their cybersecurity programs every other year for 20 years. The settlements also require the businesses to give credit reports only to customers with legitimate purposes, the FTC said in a press release.

Insufficient security measures at the three companies resulted in hackers accessing more than 1,800 credit reports without authorization between October 2006 and June 2008, the FTC said. The three companies failed to take "reasonable efforts" to protect against future breaches, even after learning of the data breaches, the agency said.

More than 780 credit reports held by SettlementOne were compromised between February and June 2008, according to the FTC complaint against the company.

The three companies buy credit reports from three nationwide consumer reporting agencies and combine them into special reports sold to mortgage brokers and others to determine consumers' eligibility for credit.

The companies named in the administrative complaints were SettlementOne Credit and its parent company, Sackett National Holdings; ACRAnet; Fajilan and Associates, doing business as Statewide Credit Services; and founder Robert Fajilan.

None of the three companies immediately responded to e-mail requests asking for comment on the proposed settlements.

"These cases should send a strong message that companies giving their clients online access to sensitive consumer information must have reasonable procedures to secure it," David Vladeck, director of the FTC's Bureau of Consumer Protection, said in a statement. "Had these three companies taken adequate steps to ensure the use of basic computer security measures, they might have foiled the hackers who wound up gaining access to extensive personal information in the consumer reporting system."

The FTC complaints charged them with violating the Fair Credit Reporting Act by failing to protect their websites and by giving credit reports to hackers when the companies had reasonable grounds to believe the reports would not be used for legal purposes.

The resellers allegedly violated the U.S. Gramm-Leach-Bliley Safeguards Rule by failing to design and implement information safeguards to control the risks to consumer information, and by failing to regularly monitor the effectiveness of their controls and procedures, the FTC added.

The proposed settlements will be open to public comment for 30 days.

The FTC issues an administrative complaint when it has "reason to believe" that the law has been or is being violated and it appears to the commission that a proceeding is in the public interest. A complaint is not a finding that the respondents violated the law.

Violations of an FTC consent order following an administrative complaint can result in civil penalties of up to $16,000 per violation.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

Join the PC World newsletter!

Error: Please check your email address.

Tags U.S. Federal Trade CommissionregulationsecuritySettlementOne CreditACRAnetDavid VladeckgovernmentIdentity fraud / theftRobert FajilanStatewide Credit Services

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Grant Gross

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?