Smart home security and monitoring company Vivint Smart Homes Inc. has agreed to pay $20 million to settle Federal Trade Commission allegations that the Utah-based firm misused credit reports to help unqualified customers obtain financing for the company’s products and services.
Under the settlement, Vivint will pay a $15 million civil penalty and an additional $5 million to compensate injured consumers.
In a complaint filed by the Department of Justice on behalf of the FTC, the Commission alleged that Vivint violated the Fair Credit Reporting Act (FCRA) by improperly obtaining credit reports in order to qualify potential customers for financing for its smart home monitoring and security products. The FTC also alleged that Vivint violated the FTC’s Red Flags Rule by failing to implement an identity theft prevention program, which is required of certain companies that regularly use or obtain credit reports.
