The US Federal Trade Commission reveals that Equifax Information Services sold the details of millions of customers who were late on their mortgage payments to third parties, some of which also resold the information, thus violating the FTC Act and the Fair Credit Reporting Act (FCRA).
The involved companies have agreed
to pay a total of $1.6 million (1.25 million EUR) to settle the charges brought against them. Of that amount, Equifax will pay $393,000 (300,000 EUR).
According to the FTC, between January 2008 and early 2010, Equifax sold Direct Lending and its affiliates – Bailey & Associates Advertising, Inc. and Virtual Lending Source, LLC – lists containing information on millions of people who met certain criteria.
These prescreened lists in some cases contained credit cards scores and the number of days the individuals were late on their mortgage payments.
Although the FCRA does not allow the use of prescreened lists for general marketing purposes, the companies didn’t consider the regulations and utilized the information to advertise various products designed for consumers in financial distress.