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

  • AI Is Now the Leading Cybersecurity Concern for Security, IT Leaders

    Arctic Wolf recently published findings from its State of Cybersecurity: 2025 Trends Report, offering insights from a global survey of more than 1,200 senior IT and cybersecurity decision-makers across 15 countries. Conducted by Sapio Research, the report captures the realities, risks, and readiness strategies shaping the modern security landscape. Read Now

  • Analysis of AI Tools Shows 85 Percent Have Been Breached

    AI tools are becoming essential to modern work, but their fast, unmonitored adoption is creating a new kind of security risk. Recent surveys reveal a clear trend – employees are rapidly adopting consumer-facing AI tools without employer approval, IT oversight, or any clear security policies. According to Cybernews Business Digital Index, nearly 90% of analyzed AI tools have been exposed to data breaches, putting businesses at severe risk. Read Now

  • Software Vulnerabilities Surged 61 Percent in 2024, According to New Report

    Action1, a provider of autonomous endpoint management (AEM) solutions, today released its 2025 Software Vulnerability Ratings Report, revealing a 61% year-over-year surge in discovered software vulnerabilities and a 96% spike in exploited vulnerabilities throughout 2024, amid an increasingly aggressive threat landscape. Read Now

  • Motorola Solutions Named Official Safety Technology Supplier of the Ryder Cup through 2027

    Motorola Solutions has today been named the Official Safety Technology Supplier of the 2025 and 2027 Ryder Cup, professional golf’s renowned biennial team competition between the United States and Europe. Read Now

  • Evolving Cybersecurity Strategies

    Organizations are increasingly turning their attention to human-focused security approaches, as two out of three (68%) cybersecurity incidents involve people. Threat actors are shifting from targeting networks and systems to hacking humans via social engineering methods, living off human errors as their most prevalent attack vector. Whether manipulated or not, human cyber behavior is leveraged to gain backdoor access into systems. This mainly results from a lack of employee training and awareness about evolving attack techniques employed by malign actors. Read Now

New Products

  • HD2055 Modular Barricade

    Delta Scientific’s electric HD2055 modular shallow foundation barricade is tested to ASTM M50/P1 with negative penetration from the vehicle upon impact. With a shallow foundation of only 24 inches, the HD2055 can be installed without worrying about buried power lines and other below grade obstructions. The modular make-up of the barrier also allows you to cover wider roadways by adding additional modules to the system. The HD2055 boasts an Emergency Fast Operation of 1.5 seconds giving the guard ample time to deploy under a high threat situation.

  • FEP GameChanger

    FEP GameChanger

    Paige Datacom Solutions Introduces Important and Innovative Cabling Products GameChanger Cable, a proven and patented solution that significantly exceeds the reach of traditional category cable will now have a FEP/FEP construction.

  • 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.