Skip to main content

As part of the Federal Trade Commission’s ongoing campaign to protect consumers’ personal information, three companies whose business is reselling consumers’ credit reports have agreed to settle FTC charges that they did not take reasonable steps to protect consumers’ personal information, failures that allowed computer hackers to access that data. The settlements require the companies to strengthen their data security procedures and submit to audits for 20 years. These are the FTC’s first cases against credit report resellers for their clients’ data security failures.

“These cases should send a strong message that companies giving their clients online access to sensitive consumer information must have reasonable procedures to secure it,” said David Vladeck, Director of the FTC’s Bureau of Consumer Protection. “Had these three companies taken adequate steps to ensure the use of basic computer security measures, they might have foiled the hackers who wound up gaining access to extensive personal information in the consumer reporting system.”

According to administrative complaints issued by the FTC, the three resellers buy credit reports from the three nationwide consumer reporting agencies (Equifax, Experian, and TransUnion) and combine them into special reports they sell to mortgage brokers and others to determine consumers’ eligibility for credit. Due to their lack of information security policies and procedures, the companies allegedly allowed clients without basic security measures, such as firewalls and updated antivirus software, to access their reports. As a result, hackers accessed more than 1,800 credit reports without authorization via the clients’ computer networks. In addition, even after becoming aware of the data breaches, the companies did not make reasonable efforts to protect against future breaches.

The resellers are SettlementOne Credit Corporation and its parent company, Sackett National Holdings Inc.; ACRAnet Inc.; Fajilan and Associates Inc., doing business as Statewide Credit Services; and Robert Fajilan. They are charged with violating the Fair Credit Reporting Act by failing to protect their internet portals and thereby furnishing credit reports to hackers who lacked a permissible purpose to have them, failing to maintain reasonable procedures to limit the furnishing of credit reports for such purposes, and furnishing credit reports when they had reasonable grounds for believing the reports would not be used for a permissible purpose. Their failure to protect consumers’ personal information also allegedly violated the FTC Act.

In addition, the resellers allegedly violated the Gramm-Leach-Bliley Safeguards Rule by failing to design and implement information safeguards to control the risks to consumer information; to regularly test or monitor the effectiveness of their controls and procedures; to evaluate and adjust their information security programs in light of known or identified risks; and to have comprehensive information security programs.

The proposed consent orders bar the respondents from violating the Safeguards Rule and require them to:

  • have comprehensive information security programs designed to protect the security, confidentiality, and integrity of consumers’ personal information, including information accessible to clients;
  • obtain independent audits of their security programs, every other year for 20 years;
  • furnish credit reports only to those with a permissible purpose; and
  • maintain reasonable procedures to limit the furnishing of credit reports to those with a permissible purpose.

The orders also contain record-keeping provisions to allow the FTC to monitor compliance.

The Commission vote to issue the three administrative complaints and to accept the consent agreement packages containing the proposed consent orders for public comment was 5-0. Commissioner Julie Brill, joined by Chairman Jon Leibowitz and Commissioners J. Thomas Rosch and Edith Ramirez, issued a statement emphasizing that “in the future we will call for imposition of civil penalties against resellers of consumer reports who do not take adequate measures to fulfill their obligations to protect information contained in consumer reports, as required by the Fair Credit Reporting Act.”

The FTC will publish a description of the consent agreement packages in the Federal Register shortly. The agreements will be subject to public comment for 30 days, beginning today and continuing through March 7, after which the Commission will decide whether to make the proposed consent orders final. Interested parties can submit written comments electronically or in paper form by following the instructions in the Invitation To Comment part of the “Supplementary Information” section. Comments in electronic form should be submitted using these Web links (,, and following the instructions on the web-based form. Comments in paper form should be mailed or delivered to: Federal Trade Commission, Office of the Secretary, Room H-113 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC is requesting that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions.

Click here for information about what consumers can do if their personal information has been compromised, and here for tips for protecting personal information.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the respondent has actually violated the law. A consent agreement is for settlement purposes only and does not constitute an admission by the respondent that the law has been violated. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $16,000.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,800 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File Nos. 0823208, 0923088, 0923089)
(SettlementOne, ACRAnet, Statewide Credit Services)

Contact Information

Frank Dorman
Office of Public Affairs
Katherine White
Bureau of Consumer Protection