Know Your Rights

TeleCheck Fined $3.5 Million for Violations of the FCRA

In a recent investigation into the regularly gripped about check authorization companies, the Federal Trade Commission ("FTC") launched an investigation into the consumer practices of TeleCheck and found that its conduct was in violation of the Fair Credit Reporting Act ("FCRA").  In response to the investigation, TeleCheck agreed to settle the dispute by paying $3.5 million and to alter its behavior to comply with the consumer protection laws. 

TeleCheck, a Texas based company, is a consumer reporting agency ("CRA"), like Equifax, Experian and Trans Union, that gathers consumer information and uses it to assist retail merchants nationwide in determining whether to accept consumer checks.  Under the FCRA, a consumer whose check is denied by a merchant based on information provided by TeleCheck or any other check clearing company, has the right to know the information reported and has the right to dispute any information with TeleCheck and have any allegedly inaccurate information investigated.  Based on the investigation conducted by the FTC, consumers have not been afforded this right by TeleCheck.  Consumer complaints include being told their checks have been declined and not advised of their right to dispute but instead told there is nothing they can do about it.    

In its formal complaint the FTC alleged that TeleCheck failed to follow proper dispute procedures by notifying consumers of their right to dispute and by refusing to dispute when requested.  Furthermore, the FTC alleged TeleCheck failed to follow reasonable procedures to assure maximum possible accuracy of the information it disseminated to merchants as required by the FCRA.    
The FTCs investigation comes at a time when consumers are working to rebuild their credit after the rough economy made it difficult for many consumers to hold down jobs and to pay their bills.  If credit reporting agencies like TeleCheck fail to comply with the requirements of the FCRA and as a result disseminate inaccurate information and refuse to investigate consumer disputes, consumers may be denied the opportunity to purchase basic needs such as food and medicine or may be unable to make rent or mortgage payments, motivating the FTC to order a hefty fine on the company.      

The FTCs order requires TeleCheck to pay $3.5 million and to change their policy regarding notifying consumers of their right to dispute inaccurate information and to investigate consumer disputes. 

If you have an issue with the accuracy of information on your credit report and need additional information contact SmithMarco P.C. for a  free consultation with a licensed attorney.

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