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IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

UNITED STATES OF AMERICA, 

 Plaintiff, 

 v. 

TELECHECK SERVICES, INC., a 

Delaware corporation, 

 and 

TRS RECOVERY SERVICES, INC., a 

Delaware corporation, 

 Defendants. 

Civil Action No. ____ 

COMPLAINT FOR CIVIL PENALTIES, PERMANENT 

INJUNCTION, AND OTHER EQUITABLE RELIEF 

 Plaintiff, the United States of America, acting upon notification and authorization to the 

Attorney General by the Federal Trade Commission (“FTC”), for its Complaint alleges: 

1. Plaintiff brings this action under sections 5(a), 5(m)(1)(A), 13(b), 16(a)(1), and 

19 of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a), 45(m)(1)(A), 53(b), 

56(a)(1), and 57b; and section 621(a) of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. 

§ 1681s(a), to obtain monetary civil penalties and injunctive or other relief for Defendants’ 

violations of the FTC Act, 15 U.S.C. § 45(a); the FCRA, 15 U.S.C. §§ 1681–1681x; and the 

Duties of Furnishers of Information to Consumer Reporting Agencies Rule, 16 C.F.R. § 660, 

issued pursuant to section 623(e)(1) of the FCRA, 15 U.S.C. § 1681s-2(e)(1), and recodified as 

Duties of Furnishers of Information, 12 C.F.R. § 1022, subpart E (“Furnisher Rule”). 

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JURISDICTION AND VENUE 

2. This Court has subject matter jurisdiction over this matter under 28 U.S.C. 

§§ 1331, 1337(a), 1345, and 1355, and under 15 U.S.C. §§ 45(a), 45(m)(A), 53(b), 56(a), and 

1681s. 

3. Venue is proper in this district under 28 U.S.C. §§ 1391(b)-(d), 1395(a), and 15 

U.S.C. § 53(b). 

PLAINTIFF 

4. This action is brought by the United States of America on behalf of the FTC. The 

FTC is an independent agency of the United States government given statutory authority and 

responsibility by, inter alia, the FTC Act, 15 U.S.C. §§ 41-58, and the FCRA, 15 U.S.C. 

§§ 1681-1681x. The FTC is charged, inter alia, with enforcing section 5(a) of the FTC Act, 15 

U.S.C. § 45(a), which prohibits unfair and deceptive acts or practices in or affecting commerce; 

and the FCRA, which imposes duties upon consumer reporting agencies. Pursuant to the FCRA, 

the FTC promulgated and enforces the Furnisher Rule, 16 C.F.R. § 660, effective August 1, 

2005, recodified as promulgated by the CFPB at 12 C.F.R. § 1022, subpart E, effective July 21, 

2011. 

DEFENDANTS 

5. Defendant TeleCheck Services, Inc. (“TeleCheck”) is a Delaware corporation 

with its principal place of business in Houston, Texas. TeleCheck transacts or has transacted 

business in this district. 

6. Defendant TRS Recovery Services, Inc. (“TRS”) is a TeleCheck affiliate. TRS is 

a Delaware corporation with its principal place of business in Houston, Texas. TRS transacts or 

has transacted business in this district. 

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COMMERCE 

7. At all times material to this Complaint, Defendants have maintained a substantial 

course of trade in or affecting commerce, as “commerce” is defined in section 4 of the FTC Act, 

15 U.S.C. § 44. 

FAIR CREDIT REPORTING ACT 

8. The FCRA was enacted in 1970, became effective on April 25, 1971, and has 

been in force since that date. The Fair and Accurate Credit Transactions Act amended the FCRA 

in December 2003, and the Dodd-Frank Act amended the FCRA in July 2010. 

9. Section 621 of the FCRA, 15 U.S.C. § 1681s, authorizes the Commission to use 

all of its functions and powers under the FTC Act to enforce compliance with the FCRA by all 

persons subject thereto except to the extent that enforcement specifically is committed to some 

other governmental agency, irrespective of whether the person is engaged in commerce or meets 

any other jurisdictional tests set forth by the FTC Act. 

10. TeleCheck is now and has been a consumer reporting agency (“CRA”), as defined 

in section 603(f) of the FCRA, 15 U.S.C. § 1681a(f): 

any person which, for monetary fees, dues, or on a cooperative nonprofit basis, 

regularly engages in whole or in part in the practice of assembling or evaluating 

consumer credit information or other information on consumers for the purpose of 

furnishing consumer reports to third parties, and which uses any means or facility 

of interstate commerce for the purpose of preparing or furnishing consumer 

reports. 

11. TeleCheck regularly sells in interstate commerce consumer information it 

assembles for the purpose of furnishing consumer reports to its clients. Consumer reports are: 

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any written, oral, or other communication of any information by a consumer 

reporting agency bearing on a consumer’s credit worthiness, credit standing, 

credit capacity, character, general reputation, personal characteristics, or mode of 

living which is used or expected to be used or collected in whole or in part for the 

purpose of serving as a factor in establishing the consumer’s eligibility for (A) 

credit or insurance to be used primarily for personal, family, or household 

purposes; (B) employment purposes; or (C) any other purpose authorized under 

section 604. 

Section 603(d)(1) of the FCRA, 15 U.S.C. § 1681a(d)(1). 

12. The FCRA imposes several obligations upon CRAs, including obligations to: 

a) follow reasonable procedures to assure the maximum possible accuracy of 

consumer report information; 

b) take certain steps when a consumer disputes information in his or her file, 

including: completing a reasonable reinvestigation within a set time period; 

providing prompt notice of disputes to those who regularly and in the ordinary 

course of business furnish information to one or more CRAs about their 

transactions or experiences with any consumer (“furnishers”); promptly deleting 

inaccurate, incomplete, or unverifiable information; promptly notifying the 

furnisher that information has been modified or deleted; maintaining reasonable 

procedures designed to prevent the reappearance of deleted information; and 

promptly providing notice to the consumer of the results of its investigation that 

includes, inter alia, an updated consumer report and a notice that the consumer 

can request a description of the reinvestigation procedure. 

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See sections 607(b) and 611 of the FCRA, 15 U.S.C. §§ 1681e(b), 1681i. 

13. TRS is now and has been a “furnisher of information” to CRAs, as described in 

section 623(a)(2)(A) of the FCRA, 15 U.S.C. § 1681s-2(a)(2)(A), because it “regularly and in the 

ordinary course of business furnishes information to one or more CRAs about the person’s 

transactions or experiences with any consumer.” TRS regularly reports information to 

TeleCheck, which is a CRA, as defined in section 603(f) of the FCRA, 15 U.S.C. § 1681a(f). 

14. The FCRA imposes several obligations upon furnishers, including obligations to 

establish and implement reasonable written policies and procedures regarding the accuracy and 

integrity of the consumer information it furnishes to a CRA. 16 C.F.R. § 660.3(a), recodified at 

12 C.F.R. § 1022.42. 

DEFENDANTS’ BUSINESS PRACTICES 

15. TeleCheck provides recommendations to merchants throughout the United States 

as to whether to accept consumers’ checks. TeleCheck has processed 560 million transactions 

for over 400,000 subscribers, at more than 375,000 locations. These recommendations take into 

account the consumer’s identification provided at the point of sale; any unpaid debts in the form 

of previous returned checks; and a variety of risk factors bearing on the likelihood that a check 

will be returned unpaid by the consumer’s financial institution. 

16. The check authorization recommendations that TeleCheck provides are designed 

to assist merchants in deciding whether to accept consumers’ checks and are, therefore, 

consumer reports as defined in section 603(d)(1) of the FCRA, 15 U.S.C. § 1681a(d)(1). 

TeleCheck’s check authorizations are communicated to third parties; bear on, inter alia, a 

consumer’s credit worthiness, character, general reputation, or personal characteristics; and are 

used or expected to be used in connection with business transactions that a consumer has 

initiated. 

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Reinvestigating Disputed Information 

17. The FCRA requires that, when a consumer attempts to pay by check at a merchant 

that uses TeleCheck, and TeleCheck does not authorize the check, the merchant must provide the 

consumer with a notice that, inter alia, (1) states that its decision not to accept the consumer’s 

check was based on information that TeleCheck provided; (2) provides TeleCheck’s contact 

information; (3) advises the consumer that they have a right to obtain a free copy of the 

information TeleCheck has on file about them; and (4) advises the consumer that they are 

entitled to dispute the accuracy of the information that TeleCheck has furnished about them. See 

section 615(a) of the FCRA, 15 U.S.C. § 1681m(a). 

18. Upon receiving a dispute from the consumer, the FCRA requires that TeleCheck 

conduct a reasonable reinvestigation to determine whether the disputed information is accurate. 

See section 611(a)(1)(A) of the FCRA, 15 U.S.C. § 1681i(a)(1)(A). 

19. In certain instances, when consumers notify TeleCheck that they dispute the 

accuracy or completeness of information in their file, TeleCheck incorrectly informs consumers 

that the only valid reasons for disputes under the FCRA are the amount of the transaction, the 

date of the transaction, and whether services were rendered. In certain other instances, 

TeleCheck attempts to shift the burden of conducting a reinvestigation to consumers, rather than 

fulfilling its legal obligation to reinvestigate disputed information. For example, if a consumer 

states that he did not authorize a transaction, TeleCheck, under certain circumstances, instructs 

him to contact the merchant, rather than initiating a reinvestigation. 

20. TeleCheck also restricts its reinvestigations in ways not permitted by the FCRA. 

For example, under certain circumstances, if a consumer alleges fraud, TeleCheck refuses to 

reinvestigate and/or clear the disputed information from the consumer’s file unless the consumer 

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provides a police report identifying the suspect and is willing to participate in the suspect’s 

prosecution. 

21. The FCRA also imposes several specific obligations upon CRAs as they conduct 

reasonable reinvestigations, which TeleCheck violates. See section 611(a) of the FCRA, 15 

U.S.C. § 1681i(a). In certain instances, TeleCheck: 

a) Fails to complete reinvestigations within 30 days or, if information is received 

from the consumer during the 30-day period that is relevant to the reinvestigation, 

within 45 days. TeleCheck restarts the 30-day dispute timeline when it receives 

additional information from a consumer who has disputed information, and, in 

certain instances, fails to adequately track the handling and resolution of 

consumer disputes, which increases the risk of inaccurate or unverifiable 

information remaining in consumers’ files longer than the FCRA permits. 

b) Fails to provide, before the expiration of the 5-business-day period beginning on 

the date on which TeleCheck receives notice of a dispute from any consumer, 

notification of the dispute to any furnisher of disputed information, at the address 

and in the manner established with the person, including all relevant information 

regarding the dispute that TeleCheck has received from the consumer; 

c) Fails to notify the consumer, within 5 business days, by mail or other means 

authorized by the consumer for that purpose, when it has terminated a 

reinvestigation of information disputed by a consumer, because it reasonably 

determined that the consumer’s dispute was frivolous or irrelevant; 

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d) After conducting a reinvestigation of information disputed by a consumer and 

finding that an item of information is inaccurate, incomplete, or cannot be 

verified, fails to: 

i) promptly delete or modify an item of information from the consumer’s 

file, as appropriate, based on the results of the reinvestigation; and/or 

ii) promptly notify the furnisher of that information that the information has 

been modified or deleted from the consumer’s file; 

e) Fails to maintain reasonable procedures designed to prevent the reappearance in a 

consumer’s file, and in consumer reports on the consumer, of information that is 

deleted pursuant to a reinvestigation. For example, if a merchant subsequently rereports to TeleCheck information that TeleCheck previously deleted, TeleCheck 

may include this information in its consumer file because it has no system or 

procedure to verify whether the information was previously determined to be 

inaccurate or unverifiable; 

f) Fails to provide sufficient written notice to a consumer of the results of a 

reinvestigation not later than 5 business days after the completion of the 

reinvestigation. In certain instances, TeleCheck failed to provide notices to 

consumers regarding the results of a reinvestigation, and in other instances, 

TeleCheck’s notices to consumers failed to include: 

i) a consumer report as it was revised as a result of the reinvestigation; and 

ii) a notice that the consumer could request a description of the procedure 

used to determine the accuracy and completeness of the information in his 

or her file.

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Accuracy of Consumer Report Information

22. Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b), requires CRAs to follow 

reasonable procedures to “assure the maximum possible accuracy of the information concerning 

the individual about whom the report relates.” 

23. In certain instances, TeleCheck failed to follow reasonable procedures to assure 

the maximum possible accuracy of consumer report information. At times, TeleCheck failed to 

promptly delete or modify an item of information from the consumer’s file after conducting a 

reinvestigation and finding that an item of information was inaccurate or unverifiable. This 

failure increased the risk of reporting inaccurate or unverifiable consumer report information 

regarding consumers who may have been denied the ability to pay by check at the thousands of 

merchants who use TeleCheck’s check authorization services. 

Furnisher Obligation: Written Procedures 

24. The FCRA required the FTC to establish and maintain guidelines for furnishers 

regarding the accuracy and integrity of information, and to prescribe regulations requiring 

furnishers to establish reasonable policies and procedures to implement those guidelines. 

Section 623(e)(1) of the FCRA, 15 U.S.C. § 1681s-2(e)(1). The FTC published those guidelines 

and regulations, respectively, at appendix A to part 660 and 16 C.F.R. § 660. In July 2011, the 

Dodd-Frank Act transferred this rulemaking authority to the CFPB, and the CFPB republished 

those guidelines and regulations at 12 C.F.R. § 1022, subpart E and appendix E to Part 1022. 

The FTC enforces these CFPB regulations and guidelines with respect to entities over which the 

FTC retains jurisdiction under the FCRA. 

25. The Furnisher Rule, 16 C.F.R. § 660, recodified at 12 C.F.R. § 1022, subpart E, 

states that furnishers must establish and implement reasonable written policies and procedures 

regarding the accuracy and integrity of the information relating to consumers that they furnish to 

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CRAs and must consider the guidelines in appendix E of that rule. 16 C.F.R. § 660.3, recodified 

at 12 C.F.R. § 1022.42. 

26. TRS has failed to consider the guidelines in appendix E of that rule in its written 

policies and procedures regarding the accuracy and integrity of the information relating to 

consumers that it furnishes to TeleCheck. 

VIOLATIONS OF THE FCRA AND THE FTC ACT 

COUNT I 

Reinvestigations of Disputed Information 

27. As described above in paragraphs 19–21, in many instances, TeleCheck has failed 

to follow the steps required by section 611 of the FCRA, including failing to complete a 

reasonable reinvestigation within 30 days or, if the period of time is extended, within 45 days; 

failing to provide prompt notice of disputes to furnishers upon receipt of notice of the dispute 

from consumers; failing to, where appropriate, provide notice of a determination that a dispute is 

frivolous or irrelevant; failing to promptly delete inaccurate, incomplete, or unverifiable 

information; failing to promptly notify the furnisher that information has been modified or 

deleted; failing to maintain reasonable procedures designed to prevent the reappearance of 

deleted information in a consumer’s file; and failing to promptly provide notice to the consumer 

of the results of its investigation that includes, inter alia, an updated consumer report and a 

notice that the consumer can request a description of the reinvestigation procedure. 

28. By and through the acts and practices described in paragraphs 19–21 and 27, 

TeleCheck has violated section 611 of the FCRA, 15 U.S.C. § 1681i. 

29. Pursuant to section 621(a)(l) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and 

practices alleged in paragraph 28 also constitute unfair or deceptive acts or practices in violation 

of section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

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COUNT II 

Accuracy of Consumer Report Information 

30. As described above in paragraph 23, TeleCheck has failed to use reasonable 

procedures to assure maximum possible accuracy of consumer report information, as required by 

607(b) of the FCRA, 15 U.S.C. § 1681e(b). 

31. By and through the acts and practices described in paragraphs 23 and 30, 

TeleCheck has violated section 607(b) of the FCRA, 15 U.S.C. § 1681e(b). 

32. Pursuant to section 621(a)(l) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and 

practices alleged in paragraph 31 also constitute unfair or deceptive acts or practices in violation 

of section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

COUNT III 

Requirements of Furnishers: Written Policies 

33. As described in paragraph 26, TRS has failed to consider the guidelines in 

appendix E of the Furnisher Rule, as required by 16 C.F.R. § 660.3(a), recodified at 12 C.F.R. § 

1022.42. 

34. By and through the acts and practices described in paragraphs 26 and 33, TRS has 

violated 16 C.F.R. § 660.3(a), recodified at 12 C.F.R. § 1022.42(a). 

35. Pursuant to section 621(a)(l) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and 

practices alleged in paragraph 34 also constitute unfair or deceptive acts or practices in violation 

of section 5(a) of the FTC Act, 15 U.S.C. § 45(a). 

INJUNCTION FOR VIOLATIONS OF THE FCRA AND THE FTC ACT 

36. Under section 621(a) of the FCRA, 15 U.S.C. § 1681s(a) and section 13(b) of the 

FTC Act, 15 U.S.C. § 53(b), this Court is authorized to issue a permanent injunction to prevent 

continued violations of the FTC Act or the FCRA. 

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EQUITABLE RELIEF FOR VIOLATIONS OF THE FCRA AND THE FTC ACT 

37. Under section 621(a) of the FCRA, 15 U.S.C. § 1681s(a), and section 13(b) of the 

FTC Act, 15 U.S.C. § 53(b), this Court is authorized to issue all equitable and ancillary relief as 

it may deem appropriate in the enforcement of the FTC Act and the FCRA, including the ability 

to order rescission or reformation of contracts, restitution, the refund of monies paid, and 

disgorgement to deprive a wrongdoer of ill-gotten gain. 

CIVIL PENALTIES FOR VIOLATIONS OF THE FCRA 

38. Section 621(a)(2)(A) of the FCRA, 15 U.S.C. § 1681s(a)(2)(A), authorizes the 

Court to award monetary civil penalties in the event of a knowing violation, which constitutes a 

pattern or practice of violations. TeleCheck’s violations of sections 607 and 611 of the FCRA, 

as alleged in this Complaint, were knowing and constituted a pattern or practice of violations. 

As specified by the Federal Civil Penalty Inflation Adjustment Act of 1990, 28 U.S.C. § 2861, as 

amended, the Court is authorized to award a penalty of not more than $2,500 per violation for 

violations occurring before February 10, 2009, and $3,500 per violation for violations occurring 

on or after that date. 

39. Each instance in which TeleCheck has failed to comply with the FCRA in one or 

more of the ways described above constitutes a separate violation of the FCRA for the purpose of 

assessing monetary civil penalties under section 621 of the FCRA. Plaintiff seeks monetary civil 

penalties for every separate violation of the FCRA. 

PRAYER FOR RELIEF 

WHEREFORE, Plaintiff requests that this Court, pursuant to 15 U.S.C. §§ 45(a), 

45(m)(1)(A), 53(b), and 1681s, and pursuant to the Court’s own equitable powers: 

(1) Enter judgment against Defendants and in favor of Plaintiff for each law violation 

alleged in this Complaint; 

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(2) Enter a permanent injunction against Defendants to prevent further violations of 

the FTC Act and the FCRA, as alleged herein; 

(3) Award Plaintiff monetary civil penalties from Defendants for each violation of the 

FCRA as alleged in this Complaint; 

( 4) Order Defendants to pay the costs of this action; and 

(5) Award Plaintiff such additional relief as the Court may deem just and proper. 

Dated ~VI. I b '2014 

FOR THE UNITED STATES OF AMERICA: 

STUART F. DELERY 

Assistant Attorney General, Civil Division 

U.S. DEPARTMENT OF WSTICE 

MAAME EWUSI-MENSAH FRIMPONG 

Deputy Assistant Attorney General 

Civil Division 

MICHAEL S. BLUME 

Director 

Consumer Protection Branch 

RICHARD GOLDBERG 

Assistant Director 

Consumer Protection Branch 

~.~ ANN ENTWISTLE 

Trial Attorney 

Consumer Protection Branch 

U.S. Department of Justice 

P.O. Box 386 

Washington, D.C. 20044 

PHONE: 202-305-3630 

FAX: 202-514-8742 

Ann.Entwistle@usdoj .gov 

FORTHEFEDERALTRADE 

COMMISSION: 

MANEESHA MITRAL 

Associate Director 

Division of Privacy and Identity Protection 

ROBERT SCHOSHINSKI 

Assistant Director 

Division of Privacy and Identity Protection 

KATHERINE ARMSTRONG 

Attorney 

Division of Privacy and Identity Protection 

Federal Trade Commission 

601 New Jersey A venue, NW 

Mail Stop NJ-8100 

13 

Washington D.C. 20001 

Tel: (202) 326-3250 

KRISTEN ANDERSON 

Attorney 

Division of Privacy and Identity Protection 

Federal Trade Commission 

601 New Jersey A venue, NW 

Mail Stop NJ-8100 

Washington D.C. 20001 

Tel: (202) 326-3209