(Washington DC) The Department of Justice, together with the Federal Trade Commission (FTC), announced a $20 million settlement resolving alleged violations of the FTC Act and the Fair Credit Reporting Act (FCRA), including violations of the Red Flags Rule. The settlement includes $15 million in civil penalties, which represents the largest civil penalty ever paid to resolve FCRA violations under the FTC Act.

Vivint Smart Home Inc. sells “smart” home security and monitoring systems, largely via a sales force that sells door-to-door. The complaint alleges that Vivint failed to implement an Identity Theft Prevention Program, allowing its sales representatives to obtain credit reports of unsuspecting consumers without the consumers’ knowledge or consent, and unfairly sold false debt to buyers or debt collectors. According to the complaint, the defendant’s lack of an Identity Theft Prevention Program violated the FTC’s Red Flags Rule, which requires covered financial institutions and creditors to establish and administer an appropriate, written Identity Theft Prevention Program. The Red Flags Rule plays an important role in the detection, prevention, and mitigation of identity theft.

The complaint further alleges that, due in part to the absence of an appropriate Identity Theft Prevention Program, Vivint’s door-to-door sales force was able to systematically use the names and identities of innocent victims to complete sales to potential Vivint customers who failed the required credit checks. When some of those Vivint customers later defaulted, Vivint allegedly then sold the false debt to third-party debt collectors that attempted to collect from the victims, who had no knowledge of the Vivint accounts created using their identities.

“The Justice Department is committed to protecting consumers against the unlawful use of their credit reports and the unfair sale of false debts,” said Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “We are pleased to join with our partners at the Federal Trade Commission on this important matter.”

“Vivint’s sales staff stole people’s personal information to approve others for loans,” said Acting Director Daniel Kaufman 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.”

As reflected in the stipulated order entered by the court, Vivint will pay $15 million in civil penalties and $5 million in equitable monetary relief. Additionally, Vivint is required to take a number of steps to prevent a recurrence of its alleged unlawful conduct. Among other things, Vivint must establish a corporate component to verify certain accounts and to investigate reports of identity theft; establish an employee monitoring and Identity Theft Prevention Program; and comply with related recordkeeping, certification, and compliance obligations.

This matter was handled by Assistant Director Lisa K. Hsiao and Trial Attorney Alisha M. Crovetto of the Civil Division’s Consumer Protection Branch. Gorana Neskovic and Kevin H. Moriarty represented the FTC.

For more information about the Consumer Protection Branch and its enforcement efforts, visit its website at https://www.justice.gov/civil/consumer-protection-branch. For more information about the FTC, visit its website at https://www.FTC.gov.

Bill and Melinda Gates announce they are getting divorced
By SALLY HO Associated Press
SEATTLE (AP) — Bill and Melinda Gates say they’re divorcing. The Microsoft co-founder and his wife said Monday that they would continue to work together at the Bill & Melinda Gates Foundation, the world’s largest private charitable foundation. In identical tweets, they said they had made the decision to end their marriage of 27 years. They met after she began working at Microsoft as a product manager in 1987. Bill Gates was formerly the world’s richest person and his fortune is estimated at well over $100 billion. How the couple end up settling their estate and any impact on the foundation will be closely watched.

EPA rule to phase out gases used in refrigerators, coolants
By MATTHEW DALY Associated Press
WASHINGTON (AP) — The Environmental Protection Agency is proposing to phase down production and use of hydrofluorocarbons, highly potent greenhouse gases commonly used in refrigerators and air conditioners. It’s the first Biden administration rule aimed at combatting climate change. The proposed rule follows through on a law Congress passed in December authorizing a 15-year phaseout of HFCs. The rule is intended to decrease U.S. production and use of the gases by 85% over the next 15 years, part of a global phaseout intended to slow climate change.

Supreme Court won’t take Maryland bump stock ban case
WASHINGTON (AP) — The Supreme Court is declining to take up a challenge to Maryland’s ban on bump stocks and other devices that make guns fire faster. The high court on Monday turned away a challenge to the ban, which took effect in October 2018. A lower court had dismissed the challenge at an early stage and that decision had been upheld by an appeals court. Maryland’s ban preceded a nationwide ban on the sale and possession of bump stocks that was put in place by the Trump administration and took effect in 2019. Both bans followed a 2017 shooting in Las Vegas in which a gunman attached bump stocks to assault-style rifles to shoot concertgoers from his hotel room. Fifty-eight people were killed.

Verizon sells internet trailblazers Yahoo and AOL for $5B
By MICHELLE CHAPMAN and TALI ARBEL AP Business Writers
AOL and Yahoo are being sold again, this time to a private equity firm. Verizon will sell Verizon Media, which consists of the pioneering tech platforms, to Apollo Global Management in a $5 billion deal. Verizon said Monday that it will keep a 10% stake in the new company, which will be called Yahoo. As part of the deal, Verizon will receive $4.25 billion in cash, preferred interests of $750 million and the minority stake. The transaction includes the assets of Verizon Media, including its brands and businesses such as Yahoo and AOL. The deal is expected to close in the second half of the year.