January 17, 2014

TeleCheck to pay $3.5 million fine under FCRA

Jan. 17, 2014 – The Federal Trade Commission announced a $3.5 million settlement with TeleCheck Services Inc., one of the nation's largest check authorization service companies, and its associated debt-collection entity, TRS Recovery Services Inc., over Fair Credit Reporting Act violations.

FTC said this is the second-largest settlement it has ever won in an FCRA case. Earlier this year, another check authorization company, Certegy Check Services, Inc., agreed to pay a $3.5 million fine to settle FTC allegations similar to those made against TeleCheck.

Under the FCRA, consumers whose checks are denied based on information TeleCheck provided to the merchant have the right to dispute that information and have TeleCheck investigate and correct any inaccuracies.

Among the charges lodged by FTC is that TeleCheck, based in Houston, Texas, did not follow proper dispute procedures, failed to follow reasonable procedures to assure "the maximum possible accuracy" of the information it provided to merchant clients, as required by the act, and failed to promptly correct errors on consumers' reports.

The order for TeleCheck and TRS requires the firms to change their business practices.