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UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

__________________________________________

 )

In the Matter of )

 )

SETTLEMENTONE CREDIT CORPORATION, ) FILE NO. 

a corporation, )

 )

and )

 )

SACKETT NATIONAL HOLDINGS, INC., )

a corporation. ) AGREEMENT CONTAINING

 ) CONSENT ORDER

___________________________________________)

The Federal Trade Commission (“Commission”) has conducted an investigation of

certain acts and practices of SettlementOne Credit Corporation (“SettlementOne”) and Sackett

National Holdings, Inc. (“SNH”) (collectively “proposed respondents”). Proposed respondents,

having been represented by counsel, are willing to enter into an agreement containing a consent

order resolving the allegations contained in the attached draft complaint. Therefore,

IT IS HEREBY AGREED by and between SettlementOne, SNH, and counsel for the

Federal Trade Commission that:

1. Proposed respondent SettlementOne is a California corporation with its principal office

or place of business at 2605 Camino Del Rio South, Suite 400, San Diego, CA 92108. 

SettlementOne is a wholly-owned subsidiary of Sackett National Holdings, Inc.

2. Proposed respondent Sackett National Holdings, Inc. (“SNH”) is a corporation with its

principal office or place of business at 2605 Camino Del Rio South, San Diego, CA

92108. SNH conducts business through its ten wholly-owned subsidiaries, including

SettlementOne.

3. Proposed respondents admit all the jurisdictional facts set forth in the draft complaint.

4. Proposed respondents waive:

(a) any further procedural steps;

(b) the requirement that the Commission’s decision contain a statement of findings of

fact and conclusions of law; and

(c) all rights to seek judicial review or otherwise to challenge or contest the validity
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of the order entered pursuant to this agreement.

5. This agreement shall not become part of the public record of the proceeding unless and

until it is accepted by the Commission. If this agreement is accepted by the Commission,

it, together with the draft complaint, will be placed on the public record for a period of

thirty (30) days and information about it publicly released. The Commission thereafter

may either withdraw its acceptance of this agreement and so notify proposed respondent,

in which event it will take such action as it may consider appropriate, or issue and serve

its complaint (in such form as the circumstances may require) and decision in disposition

of the proceeding.

6. This agreement is for settlement purposes only and does not constitute an admission by

proposed respondents that the law has been violated as alleged in the draft complaint, or

that the facts as alleged in the draft complaint, other than the jurisdictional facts, are true.

7. This agreement contemplates that, if it is accepted by the Commission, and if such

acceptance is not subsequently withdrawn by the Commission pursuant to the provisions

of Section 2.34 of the Commission’s Rules, the Commission may, without further notice

to proposed respondents, (1) issue its complaint corresponding in form and substance

with the attached draft complaint and its decision containing the following order in

disposition of the proceeding, and (2) make information about it public. When so

entered, the order shall have the same force and effect and may be altered, modified, or

set aside in the same manner and within the same time provided by statute for other

orders. The order shall become final upon service. Delivery of the complaint and the

decision and order to proposed respondents’ address as stated in this agreement by any

means specified in Section 4.4(a) of the Commission’s Rules shall constitute service. 

Proposed respondents waive any right they may have to any other manner of service. 

The complaint may be used in construing the terms of the order. No agreement,

understanding, representation, or interpretation not contained in the order or the

agreement may be used to vary or contradict the terms of the order.

8. Proposed respondents have read the draft complaint and consent order. Proposed

respondents understand that they may be liable for civil penalties in the amount provided

by law and other appropriate relief for each violation of the order after it becomes final.

ORDER

DEFINITIONS

For purposes of this Order, the following definitions shall apply:

1. “Personal information” shall mean individually identifiable information from or about an

individual consumer including, but not limited to: (a) a first and last name; (b) a home or

other physical address, including street name and name of city or town; (c) an email

address or other online contact information; (d) a telephone number; (e) a Social Security
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number; (f) a credit card or debit card account number; (g) checking account information,

(h) a driver’s license, military or state identification number; (i) a persistent identifier,

such as a customer number, that is combined with other available data that identifies an

individual consumer; or (j) any information that is combined with any of (a) through (i)

above.

2. “Gramm-Leach-Bliley Act” or “GLB Act” refers to 15 U.S.C. §§ 6801-6809, as

amended, the “Safeguards Rule” or the “Standards for Safeguarding Customer

Information Rule” refers to 16 C.F.R. Part 314, issued pursuant to Title V, Subtitle A of

the GLB Act, 15 U.S.C. §§ 6801-6809.

3. “Financial institution” shall mean as defined in Section 509(3)(A) of the GLB Act, 15

U.S.C. § 6809(3)(A).

4. “The Fair Credit Reporting Act” or “FCRA” refers to 15 U.S.C. § 1681 et seq.

5. “Consumer report” shall mean as defined in Section 603(d)(1) of the FCRA, 15 U.S.C. 

§ 1681a(d)(1). 

6. Unless otherwise specified, “respondents” shall mean Sackett National Holdings and

SettlementOne Credit Corporation, and their subsidiaries, divisions, affiliates, successors

and assigns. 

7. “Commerce” shall mean as defined in Section 4 of the Federal Trade Commission Act,

15 U.S.C. § 44.

I.

IT IS ORDERED that respondents shall, no later than the date of service of this order,

establish and implement, and thereafter maintain, a comprehensive information security program

that is reasonably designed to protect the security, confidentiality, and integrity of personal

information collected from or about consumers, including the security, confidentiality, and

integrity of personal information accessible to end users. Such program, the content and

implementation of which must be fully documented in writing, shall contain administrative,

technical, and physical safeguards appropriate to the respondents’ size and complexity, the

nature and scope of the respondents’ activities, and the sensitivity of the personal information

collected from or about consumers. The information security program must include: 

A. the designation of an employee or employees to coordinate and be

accountable for the information security program;

B. the identification of material internal and external risks to the security,

confidentiality, and integrity of personal information that could result in

the unauthorized disclosure, misuse, loss, alteration, destruction, or other

compromise of such information, and assessment of the sufficiency of any

safeguards in place to control these risks. At a minimum, this risk
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assessment should include consideration of risks in each area of relevant

operation, including, but not limited to: (1) employee training and

management; (2) information systems, including network and software

design, access, information processing, storage, transmission, and

disposal; and (3) prevention, detection, and response to attacks, intrusions,

or other systems failures;

C. the design and implementation of reasonable safeguards to control the

risks identified through risk assessment and regular testing or monitoring

of the effectiveness of the safeguards’ key controls, systems, and

procedures;

D. the development and use of reasonable steps to select and retain service

providers capable of appropriately safeguarding personal information they

receive from the respondents, and requiring service providers by contract

to implement and maintain appropriate safeguards; and

E. the evaluation and adjustment of the respondents’ information security program

in light of the results of the testing and monitoring required by sub-Part C, any

material changes to respondents’ operations or business arrangements, or any

other circumstances that respondents know or have reason to know may have a

material impact on the effectiveness of their information security program. 

 II.

IT IS FURTHER ORDERED that respondents and their officers, agents,

representatives, and employees, shall not, directly or through any corporation, subsidiary,

division, website, or other device, violate any provision of the Safeguards Rule, 16 C.F.R. Part

314. In the event that this Rule is hereafter amended or modified, respondents’ compliance with

that Rule as so amended or modified shall not be a violation of this order.

 III

IT IS FURTHER ORDERED that respondents, in connection with the compilation,

creation, sale, or dissemination of any consumer report shall:

A. Furnish such consumer report only to those persons which it has reason to believe

have a permissible purpose as described in Section 604(a)(3) of the Fair Credit

Reporting Act, 15 U.S.C. § 1681b(a)(3), or under such other circumstances as set

forth in Section 604 of the Fair Credit Reporting Act, 15 U.S.C. § 1681b;

B. Maintain reasonable procedures to limit the furnishing of such consumer report to

those with a permissible purpose and ensure that no consumer report is furnished

to any person when there are reasonable grounds to believe that the consumer

report will not be used for a permissible purpose, as required by Section 607(a) of
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the Fair Credit Reporting Act, 15 U.S.C. § 1681e(a). 

IV.

IT IS FURTHER ORDERED that respondents shall, in connection with their

compliance with Part I of this order, obtain initial and biennial assessments and reports

(“Assessments”) from a qualified, objective, independent third-party professional, who uses

procedures and standards generally accepted in the profession, provided however, that except for

SettlementOne Credit Corporation for which such Assessments are always required, Sackett

National Holdings, Inc. shall not be required to obtain such Assessments for any subsidiary,

division, affiliate, successor or assign if the personal information such entities collect, maintain,

or store from or about consumers is limited to a first and last name; a home or other physical

address, including street name and name of city or town; an email address; a telephone number;

or publicly available information regarding property ownership and appraised home value. Each

Assessment shall be prepared and completed within sixty (60) days after the end of the reporting

period to which the Assessment applies by a person qualified as a Certified Information System

Security Professional (CISSP) or as a Certified Information Systems Auditor (CISA); a person

holding Global Information Assurance Certification (GIAC) from the SysAdmin, Audit,

Network, Security (SANS) Institute; or a similarly qualified person or organization approved by

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

Commission, 600 Pennsylvania Avenue NW, Washington, D.C. 20580. The reporting period for

the Assessments shall cover: (1) the first one hundred and eighty (180) days after service of the

order for the initial Assessment, and (2) each two (2) year period thereafter for twenty (20) years

after service of the order for the biennial Assessments. Each Assessment shall:

A. set forth the specific administrative, technical, and physical safeguards that 

respondents have implemented and maintained during the reporting period;

B. explain how such safeguards are appropriate to respondents’ size and complexity,

the nature and scope of respondents’ activities, and the sensitivity of the personal

information collected from or about consumers;

C. explain how the safeguards that have been implemented meet or exceed the

protections required by the Safeguards Rule; and

D. certify that respondents’ security program is operating with sufficient effectiveness

to provide reasonable assurance that the security, confidentiality, and integrity of

personal information is protected and has so operated throughout the reporting

period.

Respondents shall provide the initial Assessment to the Associate Director for Enforcement,

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW,

Washington, D.C. 20580, within ten (10) days after the Assessment has been prepared. All

subsequent biennial Assessments shall be retained by respondents until the order is terminated

and provided to the Associate Director of Enforcement within ten (10) days after respondents
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receive such request.

V.

IT IS FURTHER ORDERED that respondents shall maintain, and upon request make

available to the Federal Trade Commission for inspection and copying: 

A. for a period of five (5) years, a print or electronic copy of each document relating

to compliance, including but not limited to documents, prepared by or on behalf of

respondents, that contradict, qualify, or call into question respondents’ compliance

with this order;

B. for a period of five (5) years, copies of all subpoenas and other communications

with law enforcement entities or personnel, whether in written or electronic form,

if such documents bear in any respect on respondents’ collection, maintenance, or

furnishing of consumer reports or other personal information of consumers; and

C. for a period of three (3) years after the date of preparation of each Assessment

required under Part IV of this order, all materials relied upon to prepare the

Assessment, whether prepared by or on behalf of the respondents, including but

not limited to all plans, reports, studies, reviews, audits, audit trails, policies,

training materials, and assessments, and any other materials relating to

respondents’ compliance with Parts I and II of this order, for the compliance

period covered by such Assessment. 

VI.

IT IS FURTHER ORDERED, that for a period of five (5) years from the date of entry

of this Order, respondents shall deliver copies of the Order as directed below:

A. Respondents must deliver a copy of this order to (1) all current and future

principals, officers, directors and managers, (2) all employees, agents and

representatives who engage in conduct related to the subject matter of the order,

and (3) any business entity resulting from any change in structure set forth in Part

VII. For current personnel, delivery shall be within five (5) days of service of this

Order. For new personnel, delivery shall occur prior to them assuming their

responsibilities. For any business entity resulting from any change in structure set

forth in Part VII, delivery shall be at least ten (10) days prior to the change in

structure.

B. Respondents must secure a signed and dated statement acknowledging receipt of

this Order, within thirty (30) days of delivery, from all persons receiving a copy of

the Order pursuant to this section. 
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VII.

IT IS FURTHER ORDERED that respondents shall notify the Commission at least

thirty (30) days prior to any change in the corporations that may affect compliance obligations

arising under this order, including, but not limited to, a dissolution, assignment, sale, merger, or

other action that would result in the emergence of a successor corporation; the creation or

dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this

order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. 

Provided, however, that with respect to any proposed change in the corporations about which

respondents learns less than thirty (30) days prior to the date such action is to take place,

respondents shall notify the Commission as soon as is practicable after obtaining such knowledge. 

Unless otherwise directed by a representative of the Commission, all notices required by this Part

shall be sent by overnight courier (not the U.S. Postal Service) to the Associate Director of

Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania

Avenue NW, Washington, D.C. 20580, with the subject line FTC v. SettlementOne Credit

Corporation, and Sackett National Holdings, Inc. Provided, however, that, in lieu of overnight

courier, notices may be sent by first-class mail, but only if an electronic version of such notices is

contemporaneously sent to the Commission at DEbrief@ftc.gov.

VIII.

IT IS FURTHER ORDERED that respondents and their successors and assigns, within

sixty (60) days after the date of service of this order, shall file with the Commission a true and

accurate report, in writing, setting forth in detail the manner and form of their own compliance

with this order. Within ten (10) day of receipt of written notice from a representative of the

Commission, they shall submit additional true and accurate written reports.

IX.

This order will terminate twenty (20) years from the date of its issuance, or twenty (20)

years from the most recent date that the United States or the Federal Trade Commission files a

complaint (with or without an accompanying consent decree) in federal court alleging any

violation of the order, whichever comes later; provided, however, that the filing of such a

complaint will not affect the duration of:

A. any Part in this order that terminates in less than twenty (20) years;

B. this order’s application to any respondent that is not named as a defendant in such

complaint; and

C. this order if such complaint is filed after the order has terminated pursuant to this

Part.

Provided, further, that if such complaint is dismissed or a federal court rules that respondents did
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not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld

on appeal, then the order will terminate according to this Part as though the complaint had never

been filed, except that the order will not terminate between the date such complaint is filed and

the later of the deadline for appealing such dismissal or ruling and the date such dismissal or

ruling is upheld on appeal.

Signed this __________day of _____________________________ , 2010.

SETTLEMENTONE CREDIT CORP.

SACKETT NATIONAL HOLDINGS, INC.

By:_________________________

JEVIN SACKETT

President

SACKETT NATIONAL HOLDINGS, INC. and

Chief Executive Officer

of SETTLEMENTONE CREDIT CORP.

By:_________________________

PATRICE A. FICKLIN

Relman, Dane & Colfax PLLC

Counsel for Sackett National Holdings, Inc.,

and SettlementOne Credit Corp.
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FEDERAL TRADE COMMISSION

By:____________________________________

ANTHONY RODRIGUEZ

KATHERINE WHITE

Counsel for the Federal Trade Commission

APPROVED:

________________________________

REBECCA E. KUEHN

Assistant Director

Division of Privacy & Identity Protection

_________________________________ _______________________________________ 

MANEESHA MITHAL DAVID C. VLADECK

Associate Director Director

Division of Privacy & Identity Protection Bureau of Consumer Protection