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TeleCheck Fined $3.5 Million for Violations of the FCRA

On Behalf of | Jan 29, 2014 | Consumer Protection

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

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

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

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

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