Vivint Will Pay $20 Million Penalty, Compensation to Customers

Vivint Will Pay $20 Million Penalty, Compensation to Customers

Vivint has agreed to pay a $20 million settlement from allegations that the company failed to use credit reports properly to help unqualified customers to obtain financing for products and services.

The terms of the settlement from the Federal Trade Commission (FTC) will break up the fine with $15 million paid as a civil penalty; the remaining $5 million will be used as compensation to affected customers. This is the largest settlement to date for a Fair Credit Reporting Act case.

The FTC filed the complaint, which implied that some Vivint staff were using the credit reports in violation of the Fair Credit Reporting Act., and that Vivint had violated FTC’s Red Flags Rule for failure to implement an identity theft prevention program. This program is required by certain companies that regularly use of seek a credit report.

The claim made by FTC is that Vivint sales staff used a process known as “white paging.” This method helps a sales person find a consumer name or a similar name in the White Pages app to use their history and qualify that prospective client for financing. Many Vivint sales rep work door-to-door, and when the sales team finds a potential client by this means, they asked customers to provide the names of relatives or someone else they might know who had better credit as a co-signer on the account without that person’s permission. If the customer then defaulted, Vivint allegedly referred the innocent party to a debt buyer. According to FTC, Vivint knew of this problem and even fired a number of sales staff, but rehired them shortly thereafter.

“Vivint’s sales staff stole people’s personal information to approve others for loans,” said Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection. “For misusing consumer credit reports and other sensitive data, and harming people’s credit, this company will pay $20 million.”

In addition to the monetary judgment—the largest to date for an FTC FCRA case—the settlement requires Vivint to implement an employee monitoring and training program, as well as an identity theft prevention program. The company must also establish a customer service task force to verify that accounts belong to the right customer before referring any account to a debt collector, and must assist consumers who were improperly referred to debt collectors.
“We are pleased to have resolved this matter related to certain historical practices. We had already taken steps before the FTC began its review to strengthen our compliance policies, and will continue to make this a focus going forward. We are deeply committed to operating with integrity and delivering exceptional service to our customers,” according to a company spokesperson.
In addition, Vivint must obtain biennial assessments by an independent third party to ensure the company is complying with the FCRA. Vivint is also prohibited from engaging in the types of improper conduct detailed in the complaint.
People who did not sign up for Vivint’s services but were contacted by debt collectors or found Vivint accounts improperly listed on their credit reports may be eligible for compensation from this settlement should contact FTC.

“Vivint’s misconduct harmed its actual customers and the unsuspecting individuals whose identities were stolen. They need help fixing their credit reports, fending off debt buyers and debt collectors seeking payments for debt they don’t owe, and obtaining compensation for these financial harms,” said FTC Commissioner Rohit Chopra. “The Commission has requested that the Attorney General charge Vivint with violating the Fair Credit Reporting Act and for selling fake debts. I believe the Commission should have also alleged that the company violated the FTC Act’s prohibitions on deceptive practices by falsifying credit applications. I also believe that Vivint turned a blind eye to obvious compliance failures by its sales force, which violated the FTC Act’s prohibition on unfair practices.”

Oddly enough, Vivint was named as Business Intelligence Group’s 2021 Excellence in Customer Service Award. The business awards program recognizes companies that are providing a differentiated level of customer service.

“Vivint is in the business of providing peace of mind, particularly during challenging times,” said David Porter, senior vice president of Customer Excellence at Vivint. “Customer obsession is a core company value at Vivint. This award recognizes our commitment to provide our customers the highest levels of service and support as we protect their homes and families.”

About the Author

Ralph C. Jensen is the Publisher/Editor in chief of Security Today magazine.

Featured

  • Security Today Announces The Govies Government Security Award Winners for 2025

    Security Today is pleased to announce the 2025 winners in The Govies Government Security Awards. The awards honor outstanding government security products in a variety of categories. Read Now

  • Survey: 60 Percent of Organizations Using AI in IT Infrastructure

    Netwrix, a cybersecurity provider focused on data and identity threats, today announced the release of its annual global 2025 Cybersecurity Trends Report based on a global survey of 2,150 IT and security professionals from 121 countries. It reveals that 60% of organizations are already using artificial intelligence (AI) in their IT infrastructure and 30% are considering implementing AI. Read Now

  • New Research Reveals Global Video Surveillance Industry Perspectives on AI

    Axis Communications, the global industry leader in video surveillance, has released its latest research report, ‘The State of AI in Video Surveillance,’ which explores global industry perspectives on the use of AI in the security industry and beyond. The report reveals current attitudes on AI technologies thanks to in-depth interviews with AI experts from Axis’ global network and a comprehensive survey of more than 5,800 respondents, including distributors, channel partners, and end customers across 68 countries. The resulting insights cover AI integration and the opportunities and challenges that exist with regard to security, safety, business intelligence, and operational efficiency. Read Now

  • SIA Urges Tariff Relief for Security Industry Products

    Today, the Security Industry Association has sent a letter to U.S. Trade Representative Jamieson Greer and U.S. Secretary of Commerce Howard Lutnick requesting relief from tariffs for security industry products and asking that the Trump administration formulate a process that allows companies to apply for product-specific exemptions. The security industry is an important segment of the U.S. economy, contributing over $430 billion in total economic impact and supporting over 2.1 million jobs. Read Now

  • Report Shows Cybercriminals Continue Pivot to Stealthier Tactics

    IBM recently released the 2025 X-Force Threat Intelligence Index highlighting that cybercriminals continued to pivot to stealthier tactics, with lower-profile credential theft spiking, while ransomware attacks on enterprises declined. IBM X-Force observed an 84% increase in emails delivering infostealers in 2024 compared to the prior year, a method threat actors relied heavily on to scale identity attacks. Read Now

New Products

  • Luma x20

    Luma x20

    Snap One has announced its popular Luma x20 family of surveillance products now offers even greater security and privacy for home and business owners across the globe by giving them full control over integrators’ system access to view live and recorded video. According to Snap One Product Manager Derek Webb, the new “customer handoff” feature provides enhanced user control after initial installation, allowing the owners to have total privacy while also making it easy to reinstate integrator access when maintenance or assistance is required. This new feature is now available to all Luma x20 users globally. “The Luma x20 family of surveillance solutions provides excellent image and audio capture, and with the new customer handoff feature, it now offers absolute privacy for camera feeds and recordings,” Webb said. “With notifications and integrator access controlled through the powerful OvrC remote system management platform, it’s easy for integrators to give their clients full control of their footage and then to get temporary access from the client for any troubleshooting needs.”

  • Automatic Systems V07

    Automatic Systems V07

    Automatic Systems, an industry-leading manufacturer of pedestrian and vehicle secure entrance control access systems, is pleased to announce the release of its groundbreaking V07 software. The V07 software update is designed specifically to address cybersecurity concerns and will ensure the integrity and confidentiality of Automatic Systems applications. With the new V07 software, updates will be delivered by means of an encrypted file.

  • QCS7230 System-on-Chip (SoC)

    QCS7230 System-on-Chip (SoC)

    The latest Qualcomm® Vision Intelligence Platform offers next-generation smart camera IoT solutions to improve safety and security across enterprises, cities and spaces. The Vision Intelligence Platform was expanded in March 2022 with the introduction of the QCS7230 System-on-Chip (SoC), which delivers superior artificial intelligence (AI) inferencing at the edge.