Oct. 18, 2012 – The Federal Trade Commission is accepting comments from the public until Nov. 9 on a proposed settlement with Equifax over the inappropriate sale of delinquent-homeowner lists to Direct Lending Source Inc. at the height of the housing crisis.
The FTC says Equifax sold prescreened lists of consumers that were 30, 60 and 90 days late on their mortgages to Direct Lending without ensuring the firm had a permissible purpose in seeking the lists. Direct Lending sold those lists to marketers seeking to target financially distressed consumers for loan modification, debt relief and foreclosure relief services.
The activity took place from Jan. 1, 2008, until early 2010 and easily could have included data on credit union members in difficult financial straits.
In the draft consent order, Equifax agrees to pay $393,000 in penalties and to cease furnishing prescreened lists to anyone Equifax believes does not have a “permissible” purpose for buying the lists. Equifax would also be prohibited from failing to maintain reasonable procedures to limit such occurrences in the future; or furnishing consumer reports to certain entities that Equifax has “reasonable grounds” for believing charge advance fees.
Direct Lending has already settled with the FTC for $1.6 million “and will be barred from using or selling prescreened lists without a permissible purpose, or in connection with solicitations for debt relief or mortgage assistance relief products or services,” the FTC said.