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“17. Section 621(a) of the FORA, 15 U.S.C. § 621(a), authorizes the ‘Court to award -

monetary civil penalties of not more than $2,500 per violation.

Under Section 13(b) of the PTC Act, 15 U.S.C. § $3(b), this Court is authorized to issue a
permanent injunction against AT&T's violations of the FCRA. ot

WHEREFORE, plaintiéf requests that this Court, pursuant to 15 U.S.C. §§ 4$(a)(1),
45(m)(1)(A), 53(b), and 1681s, and pursuant to the Court's own equity powers:

(1) Enter judgment against defendants and in favor of. plaintiff for each violation charged

in this conmplaint; :

@) Enjoin defendants from violating any provision of the FCRA; :

(3) Award Plaintiff: monetary civil Penalties from defendants for each violation of the

FCRA alleged in this complaint; and ;

(A) Award plaintiff such additional relief as the Court may deem just and proper.

Dated:
FOR THE UNITED STATES OF AMERICA:
Of Counsel:
JEFFREY §. BUCHOLTZ
JOEL C. WINSTON Acting Assistant Attorney General ‘
Associate Director for . Civil Division
Financial Practices : United States Department of Justice

Federal Trade Commission

CHRISTOPHER J. CHRISTIE
United Statos Attorncy
BRADLEY H. BLOWER, .
Assistant Director for —
Financial Practices hoa w~

Assistant United States Attomey
970 Broad Street, Suite 700
Newark, New Jersey 07102
(973) 645-2700

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11. AT&T has taken “adverse action,” ag that term is defined in Section 603(k) of the
FORA, 15 U.S.C. § 1681.a(), and Section 202.2(c) of Regulation B, 12 CFR. § 202.2(c), when
it has limited the amount of charges @ consumer can accrue on his or her AT&T account and the
consumer hay declined to accept service with this linaitation, and when it has denied consumers”
appeals of those seeount spending lint, based i in whole or in part on information contained in.
consumer reports,

12, In many instances, AT&T has taken adverse action against consumers, as ,

"described in Paragraph 11 above, but has given them notices thet lacked information required to

be disclosed under Section 615(a) of the FCRA, 15 U.S.C, § 1681m(a), For example, many of
; those notices have failed to disclose (1) the name, address and telephone number of the consumer
ropurting agency(ics) consulted, (2) the consumer's right to eentnet the conaumer reporting agency to
dispute the accuracy or completeness of the consumer report, and (3) the consumer’s right.to request a
free copy of the report from the consumer reporting agency within 60 days.

_ 13. Byand through the acts ‘and practices described in Paragraphs 7 through 12,

AT&T has violated Section 615(a) of the FCRA, 15 U.S.C. § 1681m(a).

14, Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C, § 16815(a)(1), the alleged
violations of the FCRA constitute unfhir or ancepive dats or practices in violation of Section S(a) of the
FIC Act, 15 US.C. §.45(s). :

15. The acts and practices described in Paragraphs 7 through 12 constitute a pattern of
practice of knowing violations, as set forth in Section 621(a)(2)(A) of the FCRA, 15 U.S.C.

§ 1681s(2)(2)(A),
CIVIL PENALTIES
16. Each instance in which AT&T has failed to comply with Section 615(a) of the FCRA, ,
‘15 U.S.C. § 1681m(a), constinutes a saparate violation of the FORA for the purpose of assersing

. Monetary civil penalties,


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y

RONALD G. ISAAC

SANDRA FARRINGTON

-ERIC IMPERIAL ' - EUGENE M., THIROLF

Attomeys Director

Division of Financial Practices Office of Consumer Litigation

Federal Trade Commission : _ ,

Washington, D.C. 20580 oo, Aepata te Olsen
. o ETH STEIN, Attorney -

: Office af Consumer Litigation
Civil Division

U.S. Department of Justice
Washington, D.C. 20530

| Attorneys for Plaintiff
- United States of America

-6-


@ooz
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4 .

we
CHRISTOPHER J. CHRIS , 7 . RECEIVED -CLERM
United State Atomey us. DISTRICT COUT!
SUSAN J. STEELE ay en.
Deputy Chief, Civil Division, Assistant U.S. Attomey men StP -9 P 240
970 Broad Street, Suite 700 .
Newark, New Jersey 07102
(973) 645-2920 ;
sIs7b42
UNYr. TED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
UNITED STATES OF AMERICA ; )
Plaintiff, ) .
. ) Civil No.
, )
AT&T CORP. )
Defendant, j
‘j
COMPL ‘OR CTION AND

_ LE. MONETARY “PENALTIES

Plaintiff, the United States of. ‘America, acting uy upon notification and authorization to the
Attomey General by the Federal Trade Commission (*Commision”, for its vumplaint alleges

1. Plaintiff brings this action under Séctions 5(a), 5(m)(1)(A), 13(6), and16(a) of the
Federal Trade Commission Act (“FIC Act”), 15 U.S.C. §§ 45(a), 45(m)(1)(A), $3(b), and 56(a),
Section 621 (a) of the Fair Credit Reporting Act CFCRA”), 15 U.S.C. § 16818(a), to obtain
monetary civil: penalties and injunetive and other relief for defendant’s violations of the FCRA
15 U.S.C. §§ 1681-1681u. .

JURISDICTION AND VENUE
2. This Court has jurisdiction over this matter under 28 U.S.C. §§ 1331, 1 337(2),
" 1348, and 1355, and uuder 15 U.S.C. §§ 45(m)(1)(A), 53(b), and S6(a).



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3. Venue in the United States District Court for the District of New Jersey is proper

under 15 U.S.C. § S3(b) and under 28 U.S.C. §§ 1391(b-c) and 1395(a).
JEFEN:

A. Defendant AT&T Corp, (hereinafter referred to as “AT&T”) is a New York

corporation with its principal place of business at 295 North Maple Avenue, Basking Ridge, New
‘Jersey, In connection with the matters alleged herein, AT&T has transacted business in this
District,

5. At all times materia] to this Complaint, AT&T has provided local and long
distance telephone service to consumers, as “consumer” is defined in Section 603(c) of the
FCRA, 15 U.S.C. § 1681a(c).

6, At all times material to this Complaint, AT&T has been a “ereditor,” as that term
is defined in Seetion 702(e) of the ECOA, 15 U.S.C. § 1691a(c), and Section 202,2() of
Regulation B, 12 C.F.R. § 202.2(/).

AT&T’S BUSINESS

7. Atal times material to this Complaint, AT&T has provided local and long
distance telephone service to consumers on a “credit” basis, as that term is defined in Section
202.2()) of Regulation B, 12 C.F.R, § 202.2(j). Thus, AT&T provides its services in advance and
bills consumers for payment after the services are provided.

8. Consumers who seek to obtain telephone service from AT&T are “applicants” and
must complete an “application,"as the terms “applicant” and “application” are defined in Sections
202.2(e) and 202.2(f) of Regulation B, 12 CFR. §§ 202.2(e) and 202.2(f, respectively. As part
of the application process, AT&T conducts a credit review to determine the applicant’s eligibility
to obtain service on a credit basis. ‘his procedure includes searching AT&T's internal files for
information on the applicant, and obtaining a “consumer roport” on the applicant from a

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“consumer reporting agency,” ag those terms are defined in Sections 603(d), and 603(0,
15 U.S.C. §§ 1681a(d) and 1681a(f), respectively, of the FCRA. :

» 8 Applicants whom AT&T determines, based on the credit review, are not appruved
for service aye either denied service cntircly, required to make an advance payment or deposit to
obtain service, or assigned an “Approved Usage Amount” which limits the ampunt of charges the
consumer can accrue on his or her AT&T sccount, When AT&T requires the consumer to pay 2
specified amount of ‘money up front before obtaining telephone service, that prepaid amount may serve as
a deposit which AT&T retains for the life of the consumer’s account, or may be applied to the
conumer’s balancs after she has made a certain number of on;time payments. When AT&T imposes an
“Approved Usage Amount" on the consumter’s account (due to the eonsunner’ 3 credit history or other
information), the consumer is not permitted to accrue charges in excess of that amount.

YIGLATIONS OF THE FCR4,
10. Section 615(a) of the FCRA, 15 U.S.C. § 1681m(a), requires any person who
takes “adverse action,” as that term is defiried in Section 603(k) of the FCRA, 1s US.C.

§ 1681a(k), with respect to any consumer that is based in whole or in part on any information
conteined in a consumer report to provide to the consumer: (1) notice of the adverse action taken;
(2) the name, address, and telephone number of the consumer reporting agency from which the
consumer report was obtained; (3) a statement that the consumer reporting agency did not make
the decision to take the adverse action and is unable to provide the consumer the specific reasons
why the adverse action was taken; 4 notice of the consumer’s right to obtain a free copy of the
consumer report, within 60 days from notice of the adverse action, from the consumer reporting
agency from which the report was obtained; and (5) notice of the consumer’s right to dispute with
4 consumer reporting agency the ancuracy er completeness of any information in 4 eonsummer
report furnished by the agency. ,