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Vivint settles with US Justice Dept for improper identify theft and credit reporting
June 3,  2021
Vivint settles with US Justice Dept for improper identify theft and credit reporting
          When your business model depends on continued growth to meet lender expectations and continued funding, the pressure to generate sales is enormous.  New accounts are accepted by lenders only if certain credit criteria are met, thereby reducing attrition by non-performing subscribers, reasoning that those with lower credit ratings will be more likely to default in payment.
          If you want to sell to potential customers with poor credit one way to circumvent that issue is by clandestinely using someone else’s credit.  Problem arises when the customer with the poor credit, the one who signed the alarm contract, defaults, the one with the qualifying credit, who never even knew of the alarm contract or service, is referred for collection; the first thing that’s done is report the non-performance to credit reporting agencies. 
          So that’s the plan and how it works.  It also happens to be illegal.  Here’s what happened to Vivint.
Vivint to pay $20 million after misusing credit reports.  By Jesse Kirschenbaum,Esq
          Vivint and the Federal Trade Commission have reached a $20 million settlement over the company’s illegal use of customer credit information.  Specifically, Vivint is paying a $15 million civil penalty and an additional $5 million to compensate victims.
          The complaint filed by the Department of Justice alleged that Vivint sales staff violated the Fair Credit Reporting Act by using a process known as “white paging” which involves finding another person with the same or similar name on the White Pages app and using that person’s credit report to quality the prospective unqualified customer.  The company’s sales reps also sometimes asked customers to provide the name of a relative who had better credit then added that person as a co-signer to the account without their knowledge.  When customers later defaulted on their loans Vivint referred the innocent third party to its debt buyer which subjected them to debt collectors.  Many consumers whose credit reports were misused by Vivint contacted the FTC to report identity theft after being contacted by debt collectors.
 Jesse Kirschenbaum, Esq.
Kirschenbaum & Kirschenbaum, P.C.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301