There are things that you never envision yourself having to say. Among them are, when someone posts something negative about your business online, please do not publish their personal financial information to justify your decisions.
The Federal Trade Commission has fined a mortgage broker $120,000 for doing just that when responding to negative reviews posted by consumers on Yelp! The broker was accused of violating the Fair Credit Reporting Act, the FTC Act, and the Gramm-Leach-Bliley Act.
In one case, the broker wrote:
The truth of the matter is you didn’t have one late 2 years ago. Your credit report shows 4 late payments from the Capital One account, 1 late from Comenity Bank which is Pier 1, another late from Credit First Bank, 3 late payments from an account named San Mateo. Not to mention the mortgage lates. All of these late payments are having an enormous negative impact on your credit score. Ty could not have known all of these negative items were on your credit report from theinitial conversation.
In other responses, the broker referred to individual’s “high debt-to-income ratios” that were caused by “cosigning on multiple mortgages for his children.”
The case is a cautionary tale for companies in the financial services industry about how not to respond to negative reviews online and the FTC is using the case to make an example of that.
“Companies that use credit reports and scores have a legal obligation to keep that information confidential,” said Andrew Smith, Director of the FTC’s Bureau of Consumer Protection, in a statement. “They should not disclose that information to third parties without a legitimate reason to do so, and they certainly should not post that information on the Internet to embarrass or punish consumers, as happened here.”
Along with paying the $120,000 fine, the broker must also implement a “comprehensive” information security program and is prohibited from misusing credit reports, according to the terms of the settlement.