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Consumer reporting agency Far West Credit, Inc. will pay $120,000 to settle Federal Trade Commission charges that it did not follow reasonable procedures to assure the accuracy of the information in the consumer reports it sold to mortgage companies, in violation of federal law. Assistance in this matter was provided to the FTC by the Office of Inspector General, Office of Investigations, United States Department of Housing and Urban Development.

According to an FTC complaint, Far West creates consumer credit reports for use by the mortgage industry in evaluating consumers for loans. Far West buys credit reports from the major credit reporting agencies, Equifax, TransUnion and Experian, and merges the information about the consumers. If there is insufficient information about the consumer’s credit worthiness from the major credit reporting agencies, Far West will accept information from the consumer, or other interested parties, to show consumers’ credit status with businesses such as cable companies, utilities, “rent-to-own” businesses and insurance companies – operations that do not report normally to the nationwide credit bureaus. They add this information to the reports they prepare on the consumer.

The complaint alleges that Far West provided consumer reports to Keystone Mortgage and Investment Company, Inc., a home lender. Keystone had an interest in making the loans, and Keystone’s employees provided documentation of borrowers’ credit accounts to Far West to be used in creating consumer reports for those borrowers. The credit information provided by Keystone employees was not adequately verified by Far West, the FTC charges. In fact, documentation provided by Keystone for many of the consumers was false. For example, in many cases Keystone documented accounts with utility and cable companies that did not even service the areas where the consumers lived, according to the complaint.

Keystone made mortgage loans based on the inaccurate consumer reports, and the mortgages were insured by the Fair Housing Administration (FHA) of the U. S. Department of Housing and Urban Development. Some of the mortgages have defaulted, resulting in losses to the FHA program.

The FTC charged Far West with violating the Fair Credit Reporting Act and the FTC Act. The settlement will require Far West to have in place reasonable procedures to assure the maximum possible accuracy of information in consumer reports that it prepares, and will require Far West to pay $120,000 in civil penalties. The settlement also contains certain record keeping and reporting requirements to allow the FTC to monitor compliance.

The Commission voted 4–0 to accept the settlement. The FTC’s complaint was filed by the U.S. Department of Justice in U.S. District Court for the District of Utah, Central Division.

NOTE: This consent decree is for settlement purposes only and does not constitute an admission by the defendant of a law violation. Consent decrees have the force of law when signed by the judge.

Copies of the settlement are available from the FTC’s Web site at and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

(FTC File No. 0423185)
(Civil Action No. 2:06-CV-00041 (TC))

Contact Information

Media Contact:

Claudia Bourne Farrell,
Office of Public Affairs

Staff Contact:
Peggy Twohig,
Bureau of Consumer Protection