The Federal Trade Commission has sent letters or emails to 9,000 people in Illinois and around the country who may be entitled to compensation from the home alarm and monitoring company Vivint Smart Home. In April 2021, Vivint had agreed to pay $20 million to settle a case brought by the FTC over alleged violations of the Fair Credit Reporting Act. An investigation into Vivint’s sales practices was launched when consumers who had been contacted by debt collectors reported suspected identity theft to the FTC.
White paging
FTC investigators learned that Vivint sales representatives sold the Utah-based company’s home security and monitoring services by going door to door. When homeowners agreed to purchase these services but could not obtain credit approval, Vivint sales representatives replaced their details with information from other consumers with similar names according to the FTC. This technique is called white paging. Vivint sales representatives are also said to have asked homeowners who could not secure credit approval if any of their friends or relatives had higher credit scores. The FTC says these people were then added to credit applications as co-signers without their consent.
Monitoring programs
The FTC claims that Vivint was aware of and condoned these practices. In addition to paying approximately $15 million in civil penalties and allocating $4.7 million to compensate consumers, Vivint has agreed to implement programs to train and monitor their employees and prevent identity theft. The company will also establish a credit issues task force that will check delinquent accounts before they are sent to debt collectors.
Short-term thinking
The actions allegedly taken by Vivint sales representatives are a sign of short-term thinking. Most consumers will contact the authorities when it becomes clear that their information has been used without their permission, which means white paging and similar practices are inevitably discovered by the authorities.