• FTC Enforces its Risk-Based Pricing Rule against Cable Company
  • January 6, 2014 | Authors: Arthur H. Harding; Ari Z. Moskowitz
  • Law Firm: Edwards Wildman Palmer LLP - Washington Office
  • In the first case brought under its Risk-Based Pricing Rule, the Federal Trade Commission reached a settlement with Time Warner Cable over allegations that it failed to provide the notices to customers as required by the rules. The FTC alleged that Time Warner Cable would decide whether to require a customer to submit a deposit or pay their first bill in advance based on a review of that customer’s credit report, but did not provide those customers with a risk-based pricing notice.

    The FTC adopted its revised Risk-Based Pricing Rule in 2011, requiring that creditors notify customers when, based on any consumer report containing credit history information (“credit report”), the creditor gives that customer less than the most favorable terms it provides to others. The notice must alert the customer that they have received less favorable terms based on a credit report, and must include, among other items, the following -

    • That a credit report includes information about the consumer’s credit history;
    • They have the right to dispute the accuracy of information in the credit report;
    • They may obtain a free copy of the credit report from the credit reporting agency relied on by the company; and
    • Additional notices are required when a company uses credit scores in its decision-making process.

    All companies that check credit reports on their customers should make note of the rule and adjust their practices as necessary.