In a significant development, the U.S. Federal Trade Commission (FTC) announced on September 11 that it had reached a settlement with two California-based “people-search” companies on charges of engaging in practices that breached the Fair Credit Reporting Act (FCRA). The nature of services offered by these companies involves providing users the capacity to run unlimited background verifications on individuals and charging them monthly subscription fees for access to detailed reports. The searches can be initiated using an individual’s name and/or city and state. The specific details of the companies involved in the settlement have not been disclosed.
The settlement represents a crucial development for companies operating within the FCRA’s remit, highlighting the necessity of adhering to the prescribed regulations and the potential risks of non-compliance.
The Fair Credit Reporting Act, broadly speaking, dictates the collection, dissemination, and usage of consumer information. Companies breaching its guidelines can find themselves facing severe penalties.
Further information on this development is awaited, particularly the implications of this settlement for other similar service providers and the potential operational changes they may need to introduce to ensure compliance with the FCRA.