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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

UNITED STATES OF AMERICA, 

 Plaintiff,

v.

INSTANT CHECKMATE, INC., 

 

 Defendant.

Case No.: 14cv0675-H(JMA)

CONSENT ORDER

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 relief in this 

matter, alleging that Defendant, Instant Checkmate Inc. has (“Instant Checkmate”) has 

engaged in violations of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681 -

1681x, and in unfair or deceptive acts or practices in violation of Section 5 of the Federal 

Trade Commission Act (“FTC Act”), 15 U.S.C. § 45(a). Defendant has waived service of 

the summons and the Complaint. Plaintiff and Defendant, through counsel, stipulate to 

the entry of this Consent Order for civil penalties, permanent injunction, and other relief 

(“Order”) to resolve all matters in dispute in this action between them.

//

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 THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND 

DECREED as follows: 

FINDINGS 

1. This Court has jurisdiction over this matter. 

2. The Complaint charges that Defendant participated in deceptive or unfair acts 

or practices in violation of Section 5 of the FTC Act, 15 U.S.C. §§ 45(a) and in violations 

of the Fair Credit Reporting Act, 15 U.S.C. §§1681 - 1681x. 

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 to 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. 

5. Defendant and Plaintiff waive all rights to appeal or otherwise challenge or 

contest the validity of this Order. 

DEFINITIONS 

For the purposes of this Order: 

A. “Clear and Prominent” shall mean:

 1. in textual communications (e.g., printed publications or words 

displayed on the screen of a computer), the required disclosures are of a type, size, and 

location sufficiently noticeable for an ordinary consumer to read and comprehend them, in 

print that contrasts with the background on which they appear; 

2. in communications disseminated orally or through audible means (e.g., 

radio or streaming audio), the required disclosures are delivered in a volume and cadence 

sufficient for an ordinary consumer to hear and comprehend them; 

3. in communications disseminated through video means (e.g., television 

or streaming video), the required disclosures are in writing in a form consistent with 

subparagraph (1) of this definition and shall appear on the screen for a duration sufficient 

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for an ordinary consumer to read and comprehend them, and in the same language as the 

predominant language that is used in the communication; 

4. in communications made through interactive media, such as the 

Internet, online services, and software, the required disclosures are unavoidable and 

presented in a form consistent with subparagraph (1) of this definition, in addition to any 

audio or video presentation of them; and 

5. in all instances, the required disclosures are presented in an 

understandable language and syntax, and with nothing contrary to, inconsistent with, or in 

mitigation of the disclosures used in any communication of them. 

B. “Consumer Report” shall mean 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: 

1. credit or insurance to be used primarily for personal, family, or 

household purposes; 

2. employment purposes; or 

3. any other Permissible Purpose. 

C. “Consumer Reporting Agency” 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. 

D. “Defendant” means Instant Checkmate Inc. and its successors and assigns;

//

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E. “Permissible Purpose” shall mean the circumstances under which a 

Consumer Reporting Agency may furnish a Consumer Report, as set forth in Section 604 

of the FCRA, 15 U.S.C. § 1681b, attached hereto as Attachment A to this Order. 

F. “Person” shall mean any individual, partnership, corporation, trust, estate, 

cooperative, association, government or governmental subdivision or agency, or other 

entity. 

ORDER 

I. PROHIBITED BUSINESS ACTIVITIES 

IT IS ORDERED that Defendant, Defendant’s officers, agents, servants, 

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

receive actual notice of this Order, whether acting directly or indirectly, in connection 

with operating as a Consumer Reporting Agency, are hereby permanently restrained and 

enjoined from: 

A. furnishing a Consumer Report to any Person who Defendant does not have 

reason to believe has a Permissible Purpose to receive the Consumer Report; 

B. failing to maintain reasonable procedures designed to limit the furnishing of 

Consumer Reports to Persons that have Permissible Purposes to receive them. Such 

reasonable procedures shall require that: prospective users of the information identify 

themselves, certify the purposes for which the information is sought, and certify that the 

information will be used for no other purpose; and that Defendant make a reasonable 

effort to verify the identity of a new prospective user and the uses certified by such 

prospective user prior to furnishing such user a Consumer Report; 

C. failing to maintain reasonable procedures to assure the maximum possible 

accuracy of the information concerning the individual about whom a Consumer Report 

relates; and 

D. failing to provide a notice identical or substantially similar to the one 

attached as Attachment B to this Order, to any person to whom a Consumer Report is 

provided by Defendant, provided that Defendant may provide an electronic copy of the 

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notice to a user if: (a) in the ordinary course of business, the user obtains Consumer 

Report information from Defendant in electronic form, and (b) the notice is Clear and 

Prominent. 

II. MONETARY JUDGMENT FOR CIVIL PENALTY 

IT IS FURTHERED ORDERED that: 

A. Judgment in the amount of Five Hundred Twenty-Five Thousand Dollars 

($525,000) is hereby entered in favor of Plaintiff and against Defendant as a civil penalty 

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

B. Defendant is ordered to pay Plaintiff, by making payment to the Treasurer of 

the United States, Five Hundred Twenty-Five Thousand Dollars ($525,000), which, as 

Defendant stipulates, its undersigned counsel holds for no purpose other than payment to 

Plaintiff. Such payment must be made within seven (7) days of 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: 

A. 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. 

B. The facts as alleged in the Complaint will be taken as true, without further 

proof, in any subsequent civil litigation filed by or on behalf of the Commission to enforce 

its rights to any payment or money judgment pursuant to this Order. 

C. Defendant acknowledges that its Taxpayer Identification Numbers (Social 

Security Numbers or Employer Identification Numbers), which Defendant previously 

submitted 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. 

//

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IV. ORDER ACKNOWLEDGEMENTS 

IT IS FURTHER ORDERED that Defendant obtain acknowledgements of receipt 

of this Order: 

A. Defendant, within seven (7) days of entry of this Order, must submit to the 

Commission an acknowledgment of receipt of this Order sworn under penalty of perjury. 

B. For three (3) 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 seven 

(7) days of entry of this Order for current personnel. To all others, delivery must occur 

before they assume their responsibilities. This deadline may be modified on motion to the 

Court for good cause shown. 

C. From each individual or entity to which Defendant delivered a copy of this 

Order, Defendant must obtain, within 30 days, a signed and dated acknowledgement of 

receipt of this Order. 

V. COMPLIANCE REPORTING 

IT IS FURTHER ORDERED that Defendant make timely submissions to the 

Commission: 

A. One year after entry of this Order, Defendant must submit a compliance 

report, sworn under penalty of perjury: 

1. 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 

goods and services offered, and the means of advertising, marketing and sales; (d) 

describe in detail whether and how Defendant is in compliance with each Section of this 

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Order; and (e) provide a copy of each Order Acknowledgement obtained pursuant to this 

Order, unless previously submitted to the Commission. 

2. For three (3) 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) any designated point of contact; or (b) the structure of Defendant or 

any entity that Defendant has any ownership interest in or controls directly or indirectly 

that may affect compliance obligations 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. This deadline may be modified on motion to 

the Court for good cause shown. 

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

bankruptcy petition, insolvency proceeding, or similar proceeding by or against 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, N.W., Washington, D.C. 20580. The subject line must begin: 

U.S. v. Instant Checkmate, File No. 1223221. 

//

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VI. RECORDKEEPING 

IT IS FURTHER ORDERED that Defendant must create and maintain certain 

records for three (3) years after entry of the Order. Specifically, Defendant must maintain 

the following records: 

A. Accounting records showing the revenues from all goods or services sold, all 

costs incurred in generating those revenues, and the resulting net profit or loss; 

B. Personnel records showing each employee’s: name, addresses, and telephone 

numbers; job title or position; dates of service; and, if applicable, the reason for 

termination; 

C. All employee training materials; 

D. Documents sufficient to demonstrate compliance with each provision of this 

Order, including, but not limited to, copies of acknowledgments of receipt of this Order, 

required by the Section titled “Compliance Reporting”; 

E. Complaints and refund requests, whether received directly or indirectly, and 

any responses; 

F. A copy of each unique advertisement or other marketing material; 

G. Documents sufficient to demonstrate Defendant’s compliance with 

Section 604 of the FCRA; 

H. Documents sufficient to demonstrate Defendant’s compliance with Section 

607(a) of the FCRA, including but not limited to: 

1. the name, address, and telephone number of each Consumer Report 

user; 

2. each user’s certification of the purposes for which the Consumer 

Report information is sought; and 

3. documents sufficient to demonstrate Defendant’s efforts to verify the 

identity of each user and the uses certified by such user; and 

//

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I. Documents sufficient to demonstrate Defendant’s compliance with Section 

607(d) of the FCRA, including but not limited to: 

1. a copy of each notice provided by Defendant to those who regularly 

furnish information to Defendant with respect to any consumer; 

2. a copy of each notice provided by Defendant to those to whom a 

Consumer Report is provided by Defendant; and 

3. the name, address, and telephone number of each person to whom 

Defendant provided a notice described in Subsection I(1) and I(2). 

J. This deadline may be modified on motion to the Court for good cause shown. 

VII. COMPLIANCE MONITORING 

IT IS FURTHER ORDERED that for the purpose of monitoring Defendant’s 

compliance with this Order, including any failure to transfer any assets as required by this 

Order: 

A. Within 14 days of receipt of a written request from a representative of the 

Commission or Plaintiff, 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 Fed. R. Civ. P. 29, 30 (including telephonic depositions), 

31, 33, 34, 36, 45, and 69. 

B. For matters concerning this Order, the Commission and Plaintiff are 

authorized to communicate directly with 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. 

C. 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 

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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. 

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. The Court directs 

the Clerk to close this case. The Court will re-open the case upon motion of a party for 

good cause within three years 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. 

X. DEADLINES 

The deadlines set in this Order will only be modified on motion to the Court for 

good cause shown. 

IT IS SO ORDERED. 

Dated: March 28, 2014 _________________________________

 HON. MARILYN L. HUFF 

 United States District Judge 

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