“The Complaint charges that Defendants participated in deceptive and unfair acts or practices in violation of Section 5 of the FTC Act, 15 U.S.C. § 45, and in violation of the FCRA, 15 U.S.C. §§ 1681–1681x, in the promotion and sale of background reports.”

💡 The court found sufficient basis to proceed with allegations that the companies violated both consumer protection law and the Fair Credit Reporting Act through their marketing and sale of background reports.

“The disclosure must not be contradicted or mitigated by, or inconsistent with, anything else in the communication.”

💡 This requirement in the order highlights how the companies’ ‘Remove’ and ‘Flag as Inaccurate’ buttons contradicted their claims about data correction capabilities.

“In 2014, it entered into a consent order to settle an FTC action alleging that it violated the FCRA while marketing its products for employment and tenant screening. Evidently, the corporation was on notice about legal requirements yet, per the Complaint, repeated or continued these questionable practices anyway.”

💡 Instant Checkmate had already been caught violating the same law nearly a decade earlier, yet allegedly continued the same practices, showing that prior enforcement failed to create meaningful change.

“These sums reflect a thriving market for data about individuals’ backgrounds, wherein panic or curiosity can be easily stoked by promises of ‘complete’ or ‘criminal’ records.”

💡 The business model depended on creating fear and alarm to drive subscriptions worth hundreds of millions of dollars annually, prioritizing profit over accuracy.

“PERMANENTLY RESTRAINED AND ENJOINED FROM: Failing to maintain reasonable procedures designed to limit the furnishing of Consumer Reports to Persons with Permissible Purposes to receive them.”

💡 The court permanently barred the companies from operating as consumer reporting agencies without implementing basic accuracy and verification procedures required by federal law.

“Failing to maintain reasonable procedures to assure the maximum possible accuracy of the information concerning the individual about whom the report relates.”

💡 The order explicitly requires the defendants to implement accuracy procedures they had previously avoided, directly addressing the core of their alleged misconduct.

“In offering, selling, publishing, or making available Consumer Reports for employment purposes, failing to: obtain a certification that the user has complied with consumer notice requirements.”

💡 The companies marketed to employers but failed to obtain certifications that users had provided required disclosures to job applicants, allowing reports to be misused in hiring decisions.

“Flagged or removed items would still appear when other users generated a new report on the same subject. According to the FTC, neither the ‘Remove’ nor the ‘Flag as Inaccurate’ function triggered any real investigation or correction of data.”

💡 Consumers who believed they had corrected false information in their reports had no way of knowing that the same misinformation would appear to future employers, landlords, or others who searched for them.

“The companies also allegedly tried to skew online consumer reviews by offering free ‘premium report credits’ (worth about $17.99 to $19.99 each) to users in exchange for leaving a positive testimonial on an external review site. The FTC stressed that TruthFinder did not instruct or require these compensated reviewers to disclose that they had been incentivized.”

💡 The companies manufactured an appearance of satisfied customers by paying for reviews without requiring disclosure, deceiving potential subscribers about the true customer experience.

“They purchased online keywords such as ‘pre-employment screening’ or ‘tenant background checks.'”

💡 The companies actively marketed to employers and landlords making high-stakes decisions about people’s livelihoods and housing, while failing to comply with accuracy requirements for those exact uses.

“The $5.8 million civil penalty represents less than 3% of the companies’ combined annual subscription revenue, raising questions about deterrence.”

💡 When penalties are a tiny fraction of annual revenue from wrongdoing, companies may calculate that violations are profitable even after accounting for eventual fines.

“To regularly review, assess, and determine the extent to which each Settling Defendant is operating in whole or in part as a Consumer Reporting Agency, and, if so, to regularly review, assess, and determine the extent to which the Settling Defendant is engaged in business activities prohibited by Section II of this Stipulated Order.”

💡 The order requires ongoing self-monitoring and regular assessments to ensure the companies actually implement compliance procedures, not just pay a fine and resume business as usual.

“Training of all officers, employees, and advertising affiliates, and all agents and independent contractors to the extent that their job duties are relevant to the content of this Stipulated Order, at onboarding and at least every twelve (12) months thereafter.”

💡 The order mandates comprehensive training programs to ensure everyone involved in the business understands and complies with FCRA requirements, addressing systemic failures that enabled the violations.

“Clearly and Conspicuously requiring each user, before the purchase of any product or service, prior to running any people search or background report search, and annually thereafter, to certify that the user will not use Covered Reports to make decisions about or in connection with hiring, promoting, reassigning, or continuing to employ any person.”

💡 The order requires multiple layers of user certification to prevent reports from being misused for employment, housing, or credit decisions without proper FCRA compliance.

“Failing to conduct a reasonable reinvestigation, free of charge, if a consumer disputes the completeness or accuracy of any item of information contained in a Consumer Report about that consumer that is offered, sold, published, or made available by the Settling Defendants and record the current status of the disputed information in, or delete the disputed information from, any Consumer Report.”

💡 Unlike the fake removal buttons, the order now requires actual reinvestigation and correction of disputed information within 30 days, giving consumers real recourse to fix errors.