FTC Sends $500K to Consumers in Vivint Credit Report Case

The FTC is sending almost $500,000 in payments to consumers it says were harmed by Vivint Smart Homes.

According to a Wednesday (Dec. 4) news release, the Federal Trade Commission (FTC) alleges that the home security company misused credit reports to get “unqualified customers” financing for Vivint’s products and services.

The regulator had filed a complaint against Vivint in 2021, accusing the company’s sales staff of obtaining financing for unqualified customers by using the credit history of an unrelated third party with the same or similar name, or adding cosigners without their permission.

“If customers who qualified using these deceptive tactics later defaulted on their loans, Vivint referred the unrelated third party or the impermissible cosigner to debt collectors, potentially harming that consumer’s credit,” the FTC said. “After hearing from these debt collectors, some affected consumers reported to the FTC that they were victims of identity theft.”

“The start of these consumer payments marks an important step in our evolution under new leadership and ownership,” a spokeperson for Vivint said in a statement provided to PYMNTS.

“It is important to note that since the 2021 ruling, Vivint has participated in a total of 11 audits of compliance with the Stipulated Order, with no findings of violation in any of those reports, and we remain committed to operating in compliance with all federal, state, and local laws and regulations.”

A link at the top of the company’s website directs users to resources for dealing with identity theft.

According to the release, the FTC is sending its first round of payments — averaging $1,056 — to 470 consumers who filed a valid claim before the deadline, with additional funds set to be sent at a later date.

The FTC’s efforts are happening as many Americans are dealing with identity theft and other forms of financial fraud.

Research by PYMNTS Intelligence finds that 30% of American consumers or their households have lost money to a financial scam in the last five years, meaning that scams have impacted roughly 77 million individuals. The monetary implications are often steep, with most victims losing more than $500 and many suffering thousands of dollars in financial damage.

“Banks and other FIs serve as the frontline defenders and advocates for victims of financial scams,” PYMNTS wrote recently. “We find that consumers are much more likely to recover funds if they have reported the losses to their FI. That said, more than half of scam victims consider switching FIs after their traumatic experience, and 30% actually do so.”

More recent research by PYMNTS Intelligence finds that nearly a third of consumers have fallen victim to credit card fraud. These findings, PYMNTS wrote this week “underscore the anxiety around” fraud, especially among consumers living paycheck to paycheck, 43% of whom expressed extreme concern about the threat of fraud.

“This highlights a crucial point: the more financially stretched consumers are, the more fragile their trust becomes when fraud occurs,” PYMNTS wrote.