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TeleCheck fined $3.5 Million for FCRA Violations

Jan. 2014 TeleCheck paid a 3.5 million settlement for violations of the FCRA for unfair and deceptive treatment of consumer disputes.

Jan. 2014 – One of the nation’s largest check authorization service companies, TeleCheck, was ordered to pay $3.5 million for violations of the Fair Credit Reporting Act (FCRA) along with its associated debt-collection entity, TRS Recovery Services, Inc.

The settlement is the second-largest ever obtained by the Federal Trade Commission (FTC) in an FCRA case.

The settlement stems from numerous consumer complaints against TeleCheck involving their failure to follow proper dispute procedures and failure to promptly correct errors on consumers’ TeleCheck reports.

The FCRA says consumers whose checks are denied based on information provided by have the right to dispute that information and have TeleCheck investigate and correct any inaccuracies.

TeleCheck Failed to Follow FCRA Rules

Among the charges lodged by FTC is that TeleCheck, based in Houston, Texas, did not follow proper dispute procedures, failed to follow reasonable procedures to assure “the maximum possible accuracy” of the information it provided to merchant clients, as required by the act, and failed to promptly correct errors on consumers’ reports.

TeleCheck provides recommendations to merchants throughout the United States as to whether to accept or deny a consumer’ check. Consumers have been treated unfairly by TeleCheck for years as many consumers could barely get any information whatsoever when their check was refused.

Consumers are not only entitled to their TeleCheck Report but also entitled to dispute the accuracy of the information TeleCheck has furnished about them.


As a furnisher of information and consumer reporting agency, TeleCheck has the duty to investigate disputes. The FCRA requires TeleCheck to conduct a reasonable reinvestigation to determine whether the disputed information is accurate.

In the Complaint TeleCheck is accused of incorrectly informing consumers that the only valid reasons for disputes under the FCRA are the amount of the transaction, the date of the transaction, and whether services were rendered.

In some instances, TeleCheck attempted to shift the burden of conducting a reinvestigation to consumers, rather than fulfilling its duty under the FCRA to reinvestigate disputed information. I’ve heard more than a few complaints from consumers about TeleCheck practices and how they have unfairly treated consumers.

In certain other instances TeleCheck would instruct the consumer to contact the merchant, rather than initiating a reinvestigation. Some consumers were even told there was nothing they can do about it and were never advised of their right to dispute.

“If CRAs like TeleCheck provide merchants with inaccurate information, those merchants may wrongly deny consumers the ability to buy even the most essential items, like food and medicine. The FCRA gives consumers the right to dispute and correct inaccurate information,” said Jessica Rich, Director of the Federal Trade Commission’s Bureau of Consumer Protection. “The Commission takes violations of these rights seriously.”

Get a few tips to order your free Telecheck report or how to dispute information on your TeleCheck report.

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