Compensation available through $20M Vivint settlement for misusing credit reports (2024)

Compensation available through $20M Vivint settlement for misusing credit reports (1)

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Approximately 9,000 people will soon be getting notices with instructions on filing a claim related to a settlement between the Federal Trade Commission and Vivint Smart Homes Inc. over misuse of personal information.

Vivint, a home security firm headquartered in Provo, was ordered pay $20 million in 2021 under charges of misusing credit reports of people who are not customers, in order to qualify potential customers for their services. More than $4.7 million of the $20 million will go toward compensating affected consumers.

The notices were sent out Wednesday. Once they have received the notice, victims are eligible to file a claim to receive compensation until Oct. 9. Someone who is eligible can apply for payment at www.vivintrefund.com/File-a-Claim.

“No company should misuse a person’s personal information — especially when it’s to open accounts for someone else. But that’s exactly what the FTC charged Vivint Smart Home, Inc. with doing,” the FTC said in a consumer alert.

Vivint agreed to settle allegations “that the Utah-based firm misused credit reports to help unqualified customers obtain financing for the company’s products and services” and pay the $20 million, the FTC said in its 2021 complaint.

“These funds were allocated over two years ago as part of our settlement with the FTC and we are glad to see them being distributed,” said Daniel Garen, chief ethics and compliance officer of Vivint, in a statement sent to the Daily Herald on Friday. “Vivint has taken tremendous strides to strengthen its compliance policies, and those efforts have resulted in Vivint maintaining a perfect track record of compliance through six subsequent audits conducted on behalf of the FTC since that settlement. We are committed to operating with integrity and are grateful to serve over 2 million customers throughout North America.”

The Department of Justice filed the complaint against Vivint on behalf of the FTC for Vivint sales representatives violating the Fair Credit Reporting Act and the FTC’s Red Flags Rule. At the time of the 2021 complaint, the action against Vivint was said to be the largest monetary judgment for an FCRA case.

The FCRA requires that information in a consumer report not be shared with anyone who does not have a purpose specified in the law, which can be for credit, insurance or employment reasons. In addition, consumers must be notified when adverse action is taken on the basis of the reports.

According to the FTC, Vivint improperly obtained consumers’ credit reports to qualify potential customers for financing for their services. “Vivint’s sales staff stole people’s personal information to approve others for loans,” said Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection, in a 2021 statement.

The FTC’s Red Flags Rule requires companies that regularly use or obtain credit reports to implement an identity theft prevention program, which Vivint reportedly did not do.

Kaufman added that the $20 million penalty is for Vivint “misusing consumer credit reports and other sensitive data, and harming people’s credit.”

The 2021 complaint said, “The FTC alleged that some Vivint sales representatives used a process known as ‘white paging,’ which involved finding another consumer with the same or a similar name on the White Pages app and using that consumer’s credit history to qualify the prospective unqualified customer.”

In addition, if the potential customer failed the initial credit check, sales representatives would then ask for the name of a close relative or someone else with a good credit score, in order to qualify the customer. They then added that person to the potential customer’s account as a co-signer without their permission.

“If customers qualified using these deceptive tactics later defaulted on their loans, Vivint referred the innocent third party to its debt buyer, potentially harming that consumer’s credit and subjecting them to debt collectors,” the 2021 complaint stated.

The FTC alleged that Vivint was aware of the sales representatives’ tactics and later fired many of those involved, but rehired them soon after.

“If you didn’t sign up for Vivint’s home security and monitoring services but had a Vivint account opened in your name between 2016 and 2019, you can file a claim,” the FTC said. “If you believe you are eligible, but didn’t get a claim form, please call the refund administrator at 1-833-472-1996.”

Filing a claim does not guarantee payment, the FTC said. Claims must be reviewed and verified and the amount of payment will depend on several factors, including the number of people who file.

Part of Vivint’s agreement made in 2021 was to implement an employee monitoring and training program and an identity theft prevention program. The company also must create a customer service task force to verify that accounts belong to the right customer before referring the account to a debt collector, as well as a way to help people who were improperly referred to debt collectors before.

The FTC did not respond to inquiries from the Daily Herald about the settlement.

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Compensation available through $20M Vivint settlement for misusing credit reports (2024)
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