UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

VS.

TRICOLOR AUTO ACCEPTANCE,

LLC, a limited liability company,

Defendant.

)

)

)

) CIVIL ACTION NO.

)

) 3:15-CV-3002-G

)

)

)

)

STIPULATED FINAL JUDGMENT AND ORDER 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” or

“Commission”), filed its complaint, for civil penalties, permanent injunction and

other equitable remedies in this matter, pursuant to Sections 5(a), 5(m)(1)(A), 13(b),

and 16(a) of the Federal Trade Commission Act (“FTC Act”), 15 U.S.C. §§ 45(a),

45(m)(1)(A), 53(b), and 56(a); and Section 621(a) of the Fair Credit Reporting Act

(“FCRA”), 15 U.S.C. § 1681s(a).

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 1 of 20 PageID 37
Defendant has been represented by attorneys whose names appear hereafter. 

Defendant has waived service of the summons and complaint. Plaintiff and

defendant stipulate to the entry of this Stipulated Final Judgment and Order for Civil

Penalties, Permanent Injunction, and Other Equitable Relief (“Order”) to resolve all

matters in dispute in this action between them.

Therefore, it is hereby ORDERED as follows:

FINDINGS

1. This court has jurisdiction over this matter. 

2. The complaint charges that defendant participated in acts or practices in

violation of Section 5 of the FTC Act, 15 U.S.C. § 45; the FCRA, 15 U.S.C. §§ 1681-

1681x; the Duties of Furnishers of Information to Consumer Reporting Agencies

(“Furnisher 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. 

3. Defendant neither admits nor denies any of the allegations in the

complaint, except as specifically stated in this order. Only for purposes of this action,

defendant admits the facts necessary to establish jurisdiction. 

4. Defendant waives any claim that it may have under the Equal Access to

Justice Act, 28 U.S.C. § 2412, concerning the prosecution of this action through the

date of this order, and agrees to bear its own costs and attorney’s fees. 

- 2 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 2 of 20 PageID 38
5. The parties waive all rights to appeal or otherwise challenge or contest

the validity of this order. 

6. Defendant waives any claim it may have against the Commission, its

employees, representatives, or agents that relate to the matter stated herein. 

7. Entry of this order is in the public interest. 

DEFINITIONS

For purpose of this order:

1. “Defendant” shall mean Tricolor Auto Acceptance, LLC, and its

successors and assigns. 

2. The definitions set forth in the FCRA, 15 U.S.C. § 1681a, et seq., shall

apply, including but not limited to: 

a. “Consumer” shall mean an individual.

b. “Consumer Reporting Agency” or “CRA” shall

mean 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. 

c. “Furnisher of Information” shall mean any

person who regularly and in the ordinary

course of business furnishes information to

one or more consumer reporting agencies

- 3 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 3 of 20 PageID 39
about the person’s transactions or experiences

with any consumer. 

ORDER

I. PROHIBITED BUSINESS ACTIVITIES

It is ORDERED that defendant, defendant’s officers, agents, employees, and

attorneys, and all other persons in active concert or participation with any of them,

who received actual notice of this order, whether acting directly or indirectly, are

hereby permanently restrained and enjoined from:

1. Failing to comply with 12 C.F.R. § 1022.42, a copy of which is attached

as Attachment A, including by failing to establish and implement written policies and

procedures regarding the accuracy and integrity of information relating to consumers

that is furnished to any CRA; and 

2. Failing to comply with 12 C.F.R. § 1022.43, a copy of which is attached

as Attachment B, including by failing to reasonably or adequately investigate direct

disputes about the accuracy of account balance information it furnishes to any CRA.

2. MONETARY JUDGMENT FOR CIVIL PENALTY

It is further ORDERED that:

1. Judgment in the amount of eighty-two thousand seven hundred seventyseven dollars ($82, 777) is entered in favor of the plaintiff against defendant as a civil

penalty pursuant to Section 621(a) of the FCRA, 15 U.S.C. § 1681s(a). 

- 4 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 4 of 20 PageID 40
2. Defendant is ordered to pay to the plaintiff by making payment to the

Treasurer of the United States, eighty-two thousand seven hundred seventy-seven

dollars ($82, 777), which, as defendant stipulates, its undersigned counsel holds in

escrow for no purpose other than payment to plaintiff. Such payment must be made

within seven (7) days of the entry of this order by electronic fund transfer in

accordance with instructions previously provided by a representative of plaintiff. 

III. ADDITIONAL MONETARY PROVISIONS

It is further ORDERED that:

1. If defendant is in default on any obligation under this Section, then the

judgment amount, together with interest computed pursuant to 28 U.S.C. § 1961

from the date of default to the date of payment, minus any payments previously

made pursuant to this Section, becomes immediately due.

2. Defendant relinquishes dominion and all legal and equitable right, title,

and interest in all assets transferred pursuant to this order and may not seek the

return of any assets. 

3. The facts alleged in the complaint will be taken as true, without further

proof, in any subsequent civil litigation by or on behalf of the Commission, including

in a proceeding to enforce its rights to any payment or monetary judgment pursuant

to this order.

- 5 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 5 of 20 PageID 41
4. Defendant acknowledges that its Taxpayer Identification Numbers

(Social Security Numbers or Employer Identification Numbers), which defendant

must submit to the Commission, may be used for collecting and reporting on any

delinquent amount arising out of this order, in accordance with 31 U.S.C. § 7701. 

IV. ORDER ACKNOWLEDGMENTS

It is further ORDERED that defendant obtain acknowledgments of receipt of

this order: 

1. Defendant, within 7 days of entry of this order, must submit to the

Commission an acknowledgment of receipt of this order sworn under penalty of

perjury. 

2. For 5 years after entry of this order, defendant must deliver a copy of

this order to: (1) all principals, officers, directors, and LLC managers and members;

(2) all employees, agents, and representatives who participate in conduct related to

the subject matter of the order; and (3) any business entity resulting from any change

in structure as set forth in the Section titled Compliance Reporting. Delivery must

occur within 7 days of entry of this order for current personnel. For all others,

delivery must occur before they assume their responsibilities. 

3. From each individual or entity to which defendant delivered a copy of

this order, defendant must obtain, within 30 days, a signed and dated

acknowledgment of receipt of this order. 

- 6 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 6 of 20 PageID 42
V. COMPLIANCE REPORTING

It is further ORDERED that defendant make timely submissions to the

Commission:

1. One year after entry of this order, defendant must submit a compliance

report, sworn under penalty of perjury. 

a. Defendant must: (a) identify the primary

physical, postal, and email address and

telephone number, as designated points of

contact, which representatives of the

Commission and plaintiff may use to

communicate with defendant; (b) identify all

of defendant’s businesses by all of their

names, telephone numbers, and physical,

postal, email, and Internet addresses;

(c) describe the activities of each business,

including the products and services offered,

the means of advertising, marketing, and

sales; (d) describe in detail whether and how

defendant is in compliance with each Section

of this order; and (e) provide a copy of each

order acknowledgment obtained pursuant to

this order, unless previously submitted to the

Commission.

2. For 20 years following entry of this order, defendant must submit a

compliance notice, sworn under penalty of perjury, within 14 days of any change in

the following:

a. Defendant must report any change in: (a) any

designated point of contact; or (b) the structure of

defendant or any entity that the defendant has any

ownership interest in or controls directly or

indirectly that may affect compliance obligations

- 7 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 7 of 20 PageID 43
arising under this order, including: creation, merger,

sale, or dissolution of the entity or any subsidiary,

parent, or affiliate that engages in any acts or

practices subject to this order. 

3. Defendant must submit to the Commission notice of the filing of any

bankruptcy petition, insolvency proceeding, or similar proceeding by or against such

defendant within 14 days of its filing. 

4. Any submission to the Commission required by this order to be sworn

under penalty of perjury must be true and accurate and comply with 28 U.S.C.

§ 1746, such as by concluding: “I declare under penalty of perjury under the laws of

the United States of America that the foregoing is true and correct. Executed on 

 ” and supplying the date, signatory’s full name, title (if applicable), and

signature. 

5. Unless otherwise directed by a Commission representative in writing, all

submissions to the Commission pursuant to this order must be emailed to

DEbrief@ftc.gov or sent by overnight courier (not the U.S. Postal Service) to:

Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade

Commission, 600 Pennsylvania Avenue NW, Washington, D.C. 20580. The subject

line must begin: FTC v. Tricolor Auto Acceptance, LLC (1423073). 

VI. RECORD KEEPING PROVISIONS

It is further ORDERED that defendant must create certain records for 20

years after entry of this order, and retain each such record for 5 years. Specifically, in

- 8 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 8 of 20 PageID 44
connection with furnishing information to any CRA, and receiving and investigating

direct disputes related to Consumer Reports, defendant must create and retain the

following records:

1. Accounting records showing the revenues from all goods or services sold;

2. Personnel records showing, for each person providing services, whether

as an employee or otherwise, that person’s: name; addresses; telephone numbers; job

title or position; dates of service; and (if applicable) the reason for termination;

3. All employee training materials;

4. Customer files showing the names, addresses, telephone numbers, dollar

amounts paid, and the quantity and description of goods or services purchased; 

5. Records of all consumer complaints and refund requests, whether

received directly or indirectly, such as through a third party, and any response; 

6. All records necessary to demonstrate full compliance with each provision

of this order, including but not limited to:

a. all acknowledgments of receipt of this order,

required by the section titled “Order

Acknowledgments”; and

b. all reports submitted to the FTC pursuant to

the Section titled “Compliance Reporting.”

VII. COMPLIANCE MONITORING

It is further ORDERED that, for purposes of monitoring defendant’s

compliance with this order:

- 9 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 9 of 20 PageID 45
1. Within 14 days of receipt of a written request from a representative of

the Commission, defendant must: submit additional compliance reports or other

requested information, which must be sworn under penalty of perjury; appear for

depositions; and produce documents for inspection and copying. The Commission

and plaintiff are also authorized to obtain discovery, without further leave of court,

using any of the procedures prescribed by Federal Rules of Civil Procedure 29, 30

(including telephonic depositions), 31, 33, 34, 36, 45, and 69. 

2. For matters concerning this order, the Commission and plaintiff are

authorized to communicate directly with the defendant. Defendant must permit

representatives of the Commission and plaintiff to interview any employee or other

person affiliated with defendant who has agreed to such an interview. The person

interviewed may have counsel present. 

3. The Commission and plaintiff may use all other lawful means, including

posing, through its representatives as consumers, suppliers, or other individuals or

entities, to defendant or any individual or entity affiliated with defendant, without

the necessity of identification or prior notice. Nothing in this order limits the

Commission’s lawful use of compulsory process, pursuant to Sections 9 and 20 of the

FTC Act, 15 U.S.C. §§ 49, 57b-1. 

- 10 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 10 of 20 PageID 46
VIII. RETENTION OF JURISDICTION

It is further ORDERED that this court retains jurisdiction of this matter for

purposes of construction, modification, and enforcement of this order.

IX. COSTS AND ATTORNEYS’ FEES

It is further ORDERED that each party shall bear its own costs and attorneys’

fees incurred in connection with this action.

The parties hereby stipulate to entry of the foregoing order, which shall

constitute a final order in this action.

September 16, 2015.

___________________________________

A. JOE FISH

Senior United States District Judge

SO STIPULATED AND AGREED:

FOR PLAINTIFF, THE UNITED STATES 

OF AMERICA:

JOHN R. PARKER

United States Attorney

LISA R. HASDAY

Assistant United States Attorney

Northern District of Texas

1100 Commerce Street, Third Floor

Dallas, Texas 75242

Telephone: 214.659.8737

- 11 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 11 of 20 PageID 47
Facsimile: 214.659.8807

Email: Lisa.Hasday@usdoj.gov

BENJAMIN C. MIZER

Principal Deputy Assistant Attorney General

Civil Division

JONATHAN F. OLIN

Deputy Assistant Attorney General

MICHAEL S. BLUME

Director

Consumer Protection Branch

ANDREW E. CLARK

Assistant Director

 /s/ Kerala T. Cowart

KERALA T. COWART

California Bar No. 284519

Trial Attorney

Consumer Protection Branch

U.S. Department of Justice

P.O. Box 386

Washington, D.C. 20044

Telephone: 202.353.3881

Facsimile: 202.514.8742

Email: Kerala.T.Cowart@usdoj.gov

FOR THE FEDERAL TRADE COMMISSION:

MANEESHA MITHAL

Associate Director

Division of Privacy and Identity Protection

MARK EICHORN

Assistant Director

Division of Privacy and Identity Protection

- 12 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 12 of 20 PageID 48
DAVID LINCICUM

Attorney

Division of Privacy and Identity Protection

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, D.C. 20580

Telephone: 202.326.2773

Facsimile 202.326.3062

Email: dlincicum@ftc.gov

JACQUELINE CONNOR

Attorney

Division of Privacy and Identity Protection

Federal Trade Commission

600 Pennsylvania Avenue, NW

Washington, D.C. 20580

Telephone: 202.326.2884

Facsimile: 202.326.3062

Email: jconnor@ftc.gov

FOR DEFENDANT:

 /s/ Mauricio Delgado

MAURICIO DELGADO

Chief Executive Officer

TRICOLOR AUTO ACCEPTANCE, LLC

MICHAEL A. BENOIT

MICHAEL A. GOODMAN

ALLEN H. DENSON

Counsel for TRICOLOR AUTO ACCEPTANCE, LLC

Hudson Cook, LLP

1020 19th Street, NW

7th Floor

Washington, D.C. 20036

- 13 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 13 of 20 PageID 49
ATTACHMENT “A”

12 C.F.R. § 1022.42. Reasonable policies and procedures concerning the

accuracy and integrity of furnished information. 

1. Policies and procedures. Each furnisher must establish and implement

reasonable written policies and procedures regarding the accuracy and integrity of the

information relating to consumers that it furnishes to a consumer reporting agency. 

The policies and procedures must be appropriate to the nature, size, complexity, and

scope of each furnisher’s activities.

2. Guidelines. Each furnisher must consider the guidelines in appendix E of

this part in developing its policies and procedures required by this section, and

incorporate those guidelines that are appropriate.

3. Reviewing and updating policies and procedures. Each furnisher must review

its policies and procedures required by this section periodically and update them as

necessary to ensure their continued effectiveness. 

- 14 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 14 of 20 PageID 50
ATTACHMENT “B”

12 C.F.R. § 1022.43. Direct Disputes

(a) General rule. Except as otherwise provided in this section, a furnisher must

conduct a reasonable investigation of a direct dispute if it relates to:

(1) The consumer’s liability for a credit account or other debt with the

furnisher, such as direct disputes relating to whether there is or has been identity

theft or fraud against the consumer, whether there is individual or joint liability on an

account, or whether the consumer is an authorized user of a credit account;

(2) The terms of a credit account or other debt with the furnisher, such

as direct disputes relating to the type of account, principal balance, scheduled

payment amount on an account, or the amount of the credit limit on an open-end

account;

(3) The consumer’s performance or other conduct concerning an

account or other relationship with the furnisher, such as direct disputes relating to the

current payment status, high balance, date a payment was made, the amount of a

payment made, or the date an account was opened or closed; or

(4) Any other information in a consumer report regarding an account or

other relationship with the furnisher that bears on the consumer’s creditworthiness,

- 15 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 15 of 20 PageID 51
credit standing, credit capacity, character, general reputation, personal characteristics,

or mode of living.

(b) Exceptions. The requirements of paragraph (a) of this section do not apply

to a furnisher if:

(1) The direct dispute relates to:

(i) The consumer’s identifying information

(other than a direct dispute relating to a

consumer’s liability for a credit account or

other debt with the furnisher, as provided in

paragraph (a)(1) of this section) such as

name(s), date of birth, Social Security

number, telephone number(s), or address(es);

(ii) The identity of past or present employers;

(iii) Inquiries or requests for a consumer

report;

(iv) Information derived from public records,

such as judgments, bankruptcies, liens, and

other legal matters (unless provided by a

furnisher with an account or other

relationship with the consumer);

(v) Information related to fraud alerts or

active duty alerts; or

(vi) Information provided to a consumer

reporting agency by another furnisher; or

(2) The furnisher has a reasonable belief that the direct dispute is

submitted by, is prepared on behalf of the consumer by, or is submitted on a form

supplied to the consumer by, a credit repair organization, as defined in 15 U.S.C.

- 16 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 16 of 20 PageID 52
§ 1679a(3), or an entity that would be a credit repair organization, but for 15 U.S.C.

§ 1679a(3)(B)(i).

(c) Direct dispute address. A furnisher is required to investigate a direct dispute

only if a consumer submits a dispute notice to the furnisher at:

(1) The address of a furnisher provided by a furnisher and set forth on a

consumer report relating to the consumer;

(2) An address clearly and conspicuously specified by the furnisher for

submitting direct disputes that is provided to the consumer in writing or

electronically (if the consumer has agreed to the electronic delivery of information

from the furnisher); or

(3) Any business address of the furnisher if the furnisher has not so

specified and provided an address for submitting direct disputes under paragraphs

(c)(1) or (2) of this section.

(d) Direct dispute notice contents. A dispute notice must include:

(1) Sufficient information to identify the account or other relationship

that is in dispute, such as an account number and the name, address, and telephone

number of the consumer, if applicable;

(2) The specific information that the consumer is disputing and an

explanation of the basis for the dispute; and

- 17 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 17 of 20 PageID 53
(3) All supporting documentation or other information reasonably

required by the furnisher to substantiate the basis of the dispute. This

documentation may include, for example, a copy of the relevant portion of the

consumer report that contains the allegedly inaccurate information; a police report; a

fraud or identity theft affidavit; a court order; or account statements.

(e) Duty of furnisher after receiving a direct dispute notice. After receiving a dispute

notice from a consumer pursuant to paragraphs (c) and (d) of this section, the

furnisher must:

(1) Conduct a reasonable investigation with respect to the disputed

information;

(2) Review all relevant information provided by the consumer with the

dispute notice;

(3) Complete its investigation of the dispute and report the results of

the investigation to the consumer before the expiration of period under section

611(a)(1) of the FCRA (15 U.S.C. 1681i(a)(1)) within which a consumer reporting

agency would be required to complete its action if the consumer had elected to

dispute the information under that section; and

(4) If the investigation finds that the information reported was

inaccurate, promptly notify each consumer reporting agency to which the furnisher

provided inaccurate information of that determination and provide to the consumer

- 18 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 18 of 20 PageID 54
reporting agency any correction to that information that is necessary to make the

information provided by the furnisher accurate.

(f) Frivolous or irrelevant disputes. 

(1) A furnisher is not required to investigate a direct dispute if the

furnisher has reasonably determined that the dispute is frivolous or irrelevant. A

dispute qualifies as frivolous or irrelevant if:

(i) The consumer did not provide sufficient

information to investigate the disputed

information as required by paragraph (d) of

this section;

(ii) The direct dispute is substantially the

same as a dispute previously submitted by or

on behalf of the consumer, either directly to

the furnisher or through a consumer reporting

agency, with respect to which the furnisher

has already satisfied the applicable

requirements of the Act or this section;

provided, however, that a direct dispute is not

substantially the same as a dispute previously

submitted if the dispute includes information

listed in paragraph (d) of this section that had

not previously been provided to the furnisher;

or

(iii) The furnisher is not required to

investigate the direct dispute because one or

more of the exceptions listed in paragraph (b)

of this section applies.

(g) Notice of determination. Upon making a determination that a dispute is

frivolous or irrelevant, the furnisher must notify the consumer of the determination

- 19 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 19 of 20 PageID 55
not later than five business days after making the determination, by mail or, if

authorized by the consumer for that purpose, by any other means available to the

furnisher.

(h) Contents of notice of determination that a dispute is frivolous or irrelevant. A

notice of determination that a dispute is frivolous or irrelevant must include the

reasons for such determination and identify any information required to investigate

the disputed information, which notice may consist of a standardized form describing

the general nature of such information.

- 20 -

Case 3:15-cv-03002-G Document 6 Filed 09/16/15 Page 20 of 20 PageID 56