On December 11, 2020, the Consumer Financial Protection Bureau (Bureau) and the Arkansas Attorney General (AG) announced that they filed a complaint and proposed stipulated judgment in the U.S. District Court for the Eastern District of Arkansas against a home-security company. The complaint alleges that the company—which provided credit to customers for its products and services—violated the Consumer Financial Protection Act (CFPA), Fair Credit Reporting Act (FCRA), and Regulation V.
The CFPB and Arkansas AG allege that the home-security company charged higher activation fees for customers with lower credit scores, and in doing so, failed to provide customers with the requisite risk-based pricing notice under FCRA and Regulation V.
If entered by the court, the proposed stipulated judgment will require the home-security company to pay a $600,000 civil money penalty. The judgment would further require the home-security company to provide proper notice to affected customers and periodically report notice compliance to the Bureau.