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The security company pays $ 20 million to settle FTC fees



A home security and surveillance company has agreed to pay $ 20 million to settle Federal Trade Commission fees as they misused credit reports to help unqualified customers obtain financing for the company's products and services, the agency said Thursday.

The FTC said Provo, Utah-based Vivint Smart Homes Inc., has agreed to pay a $ 15 million fine and an additional $ 5 million to compensate injured customers.

The company said in a statement that it has changed its practice.

The FTC accused Vivint of violating the Fair Credit Reporting Act by incorrectly obtaining credit reports to qualify potential customers for financing for its smart home monitoring and security products.

It is said that it also violates the FTC's "red flags" rule by not implementing an identity theft prevention program, which is required by some companies that regularly use or receive credit reports.

The FTC said that some of Vivint's sales representatives, who work door-to-door and only on commission, used a process called "white paging", which involved finding another consumer with the same or similar name on the white pages app and using consumer credit history to qualify potential unqualified customers.

Sales representatives sometimes also asked customers for the name of someone with better credit, such as a relative, and then added that party as a co-signer to the account without their permission.

If these customers later did not pay the loans, Vivint referred them to this debt buyer and exposed them to debt collectors, the FTC said. to implement an employee's monitoring and training program, among other provisions.

The company said in a statement, "We are pleased to have resolved this issue in connection with certain historical practices.

" We had already taken action before the FTC began its review to strengthen our compliance policy and will continue to make this a focus in the future.

“We are deeply committed to working with integrity and delivering exceptional service to our customers.

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