Penalty Amount
$20,000,000
Consumers Affected
9,000
The FTC settled with Vivint Smart Home, Inc. for misusing consumer credit reports to qualify customers for financing without permission, harming innocent third parties' credit. Vivint agreed to pay $20 million, with over $4.7 million for consumer compensation, and established a Customer Service Task Force.
Vivint must pay $20 million in total, with more than $4.7 million allocated for consumer compensation through a claims process, and establish a Customer Service Task Force to assist affected consumers.
In-house legal teams should review customer financing agreements, vendor contracts with financing partners, and sales representative guidelines/scripts. Key clauses to examine include: (1) credit check authorization provisions to ensure explicit, documented consent is obtained from the correct individual before pulling a credit report; (2) data sharing and third-party beneficiary clauses to prevent unauthorized use of another person's credit information; (3) cosigner or guarantor agreement terms to verify separate, informed consent is obtained from the cosigner; (4) representations and warranties regarding Fair Credit Reporting Act (FCRA) compliance; and (5) audit rights to monitor FCRA adherence. Changes may be needed to mandate identity verification procedures that do not rely on substituting or adding third-party credit data, implement separate consent mechanisms for cosigners, and strengthen compliance certifications with specific FCRA requirements.
Entity
Vivint Smart Home, Inc.
Also known as: Vivint
Industry
TechnologyOfficial Press Release
https://www.ftc.gov/news-events/news/press-releases/2023/08/ftc-announces-claims-process-consumers-whose-credit-reports-were-misused-home-security-firm-vivint
Vivint
https://www.ftc.gov/Vivint
smart home monitoring company vivint will pay 20 million set
https://www.ftc.gov/news-events/news/press-releases/2021/04/smart-home-monitoring-company-vivint-will-pay-20-million-settle-ftc-charges-it-misused-consumer
Federal Trade Commission Enforcement Page
https://www.ftc.gov/enforcement
"Vivint Smart Home, Inc."
"pay a total of $20 million"
"Fair Credit Reporting Act (FCRA)"
"using the credit history of another person with a similar name or adding a friend or relative of the customer as cosigner without their permission"
"2021/04/"
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$1.9M
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