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Earlier this month, the CFPB along with the Arkansas Attorney General, filed a complaint against a Utah-based security company, seeking injunctive relief, monetary relief and civil penalties over allegations that the company inappropriately accessed and utilized consumer credit information in violation of the FCRA. In its complaint filed in the Eastern District of Arkansas, the CFPB outlines the basis for its jurisdiction over the defendant company, citing that the defendant not only conducted door-to-door sales calls in Arizona, but throughout the country. Defendant has admitted the facts necessary for the Court to establish jurisdiction over both it and this matter.
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Welcome to Wiley’s update on recent developments and what’s next in consumer protection at the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC). In this newsletter, we analyze recent regulatory announcements, recap key enforcement actions, and preview upcoming deadlines and events. We also include links to our articles, blogs, and webinars with more analysis in these areas. We understand that keeping on top of the rapidly evolving regulatory landscape is more important than ever for businesses seeking to offer new and ground-breaking technologies.
Regulatory Announcements
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On December 11, 2020, the Consumer Financial Protection Bureau (“CFPB”) and the Arkansas Attorney General reached a $600,000 settlement with Alder Holdings, LLC concerning alleged violations of the FCRA’s Risk-Based Pricing Rule. Alder sells home-security and alarm systems, primarily door-to-door, on a nationwide basis.
The Complaint alleged that Alder violated the FCRA’s Risk-Based Pricing Rule, 15 U.S.C. § 1681m(h), which requires companies to provide notice when they provide consumers less favorable terms based on their credit reports. As part of Alder’s usual business practices, the amount of the activation fee varies based on the results of the consumer’s credit score. The Complaint alleged consumers with lower credit scores were charged far higher activation fees as opposed to those with higher credit scores. Despite this allegedly clear instance of Risk-Based Pricing, Alder failed to prov
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