FTC Finds Falsehoods Went Unchecked by Background Report Providers

  • The FTC issued a proposed order against background report providers TruthFinder LLC, Instant Checkmate, LLC, and affiliated entities to resolve allegations that they violated the FTC Act and the Fair Credit Reporting Act by failing to verify the accuracy of their reports.
  • According to the FTC’s complaint, TruthFinder and Instant Checkmate made no effort to ensure that the information they aggregated from third-party data providers was accurate. The companies also allegedly made false marketing claims indicating that individuals whose names were searched had criminal or arrest records in order to induce consumers to pay for a background report, which often contained only non-criminal traffic violations. Additionally, TruthFinder and Instant Checkmate allegedly represented that subscribers could remove inaccurate information, which functions did not work as advertised, among other allegations.
  • Under the proposed order, the companies must pay a $5.8 million penalty; are permanently prohibited from misrepresenting the accuracy of their reports; and must establish and implement programs to ensure compliance with all laws applicable to consumer reporting agencies.