United States Files Complaint To Stop Deceptive And Improper Sales Of Consumer Background Reports
(STL.News) – The Department of Justice, together with the Federal Trade Commission (FTC), today announced that the United States filed a civil complaint to stop a California company from deceiving customers in connection with its sale of subscriptions to a consumer background report service, and to seek redress for injury to consumers as well as civil penalties.
The Department of Justice filed the complaint on July 27 in the U.S. District Court for the Central District of California against MyLife.com, Inc. and the company’s founder and chief executive officer, Jeffrey Tinsley. The complaint alleges that the defendants sell subscriptions to their website’s consumer background report service by implying, often falsely, that individuals have criminal or sexual offense records that can be viewed only by buying a subscription. According to the complaint, the defendants also misrepresent or fail to disclose material terms of those subscriptions, including that payment for multiple months is charged upfront, that subscriptions will automatically renew, and that the subscription or automatic renewal could be cancelled only by calling a customer service center that prevented or discouraged cancellations. The complaint alleges that this conduct violates the FTC Act, the Telemarketing Sales Rule, and the Restore Online Shoppers’ Confidence Act.
According to the complaint, the defendants are also violating the Fair Credit Reporting Act because they promote use of their background reports for employment decisions, tenant screening, or other prohibited purposes—and know consumers use the reports for such purposes—but they lack reasonable procedures to ensure maximum possible accuracy of their background reports or to determine who is using them and why.
“Americans should be able to shop online and by phone with confidence that they are not being deceived about the services they are buying or the terms of sale,” said Acting Assistant Attorney General Ethan P. Davis of the Department of Justice’s Civil Division. “The Department of Justice is committed to working with the FTC to protect consumers from deceptive sales practices and from so-called credit reports that may contain inaccurate information and be used for improper purposes.”
The complaint seeks a permanent injunction to prohibit the defendants from future violations, as well as monetary civil penalties and relief to redress injury caused to consumers.
A complaint is merely a set of allegations that, if the case were to proceed to trial, the government would need to prove by a preponderance of the evidence.
The case is being handled by attorneys in the Civil Division’s Consumer Protection Branch, including Senior Litigation Counsel Lisa K. Hsiao and Trial Attorneys Patrick R. Runkle and Zachary A. Dietert, in conjunction with staff at the FTC’s Division of Privacy and Identity Protection.