Excerpted from a Federal Trade Commission Blog by Seena Gressin

Advertising keywords are the carnival barkers of the internet. Their job is to shout, “Me, me, me, me, me!” to people searching online for a product or service. If successful, they’ll get prospective customers to click on the ad or website of whoever paid their fare. A newly announced FTC case is a reminder that if you use keywords to promote your product for uses covered by the Fair Credit Reporting Act (FCRA), it’s time to step right up and pay attention to the FCRA’s consumer protections.

San Diego-based companies Instant Checkmate and TruthFinder, and three related companies, will pay $5.8 million to settle charges they violated the FCRA and the FTC Act in the course of marketing their consumer background reports as a way for prospective employers and landlords to screen applicants. 

The companies sell consumer background reports through their Instant Checkmate and TruthFinder websites. The FTC says they assemble and merge information they get from other data brokers. Their reports usually include phone numbers, addresses, relatives, arrest and criminal records, social media profiles, and more. Customers can access the reports by buying monthly subscriptions to the websites.

Where did they go wrong? According to the complaint, the companies bought thousands of advertising keywords from Google and Microsoft to ensure that Instant Checkmate or TruthFinder ads appeared in response to searches related to employment or tenant screening. 

According to the FTC, by providing background reports they expected would be used to determine eligibility for employment or housing, Instant Checkmate and TruthFinder qualified as “consumer reporting agencies” (CRAs), subject to the FCRA. The complaint alleges they violated the FCRA in multiple ways, including by failing to maintain reasonable procedures to ensure users of their reports had permissible purposes for accessing them, failing to follow reasonable procedures to assure maximum accuracy for their reports, and failing to provide FCRA-mandated “User Notices” outlining important consumer protections.

The complaint also alleges the companies deceptively promoted their reports, including with false claims in ads that a searched-for person had a criminal or arrest record. For example, if someone searched for the name “John Smith” using the search engines Google or Bing, they might get an ad saying, “Check John Smith’s Arrests,” with a link to the Instant Checkmate or TruthFinder website.

Similarly, if someone searched for a name on the TruthFinder or Instant Checkmate website before buying a subscription, the site delivered statements like, “The arrest records sections of your report WILL SHOW arrest or conviction records associated with the name [John Smith].” (Their emphasis, not ours.) The FTC says that often, when consumers went on to purchase reports after seeing these ads, they found the reports didn’t contain criminal or arrest records or contained only non-criminal traffic violations. 

You’ll want to read the complaint for details of other alleged deceptive practices. For example, the complaint alleges the companies promoted Instant Checkmate and TruthFinder reports as highly accurate but made no effort to verify the information they got from their vendors. 

Together, the settling companies – Instant Checkmate, TruthFinder, The Control Group Media Company, IntelicareDirect, and PubRec — are subject to a $5.8 million civil penalty.

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