U.S. Moves to Halt 'Deceptive' Sales Tactics in Online Background Checks

LOS ANGELES (CNS) - The U.S. Department of Justice today sued the Los Angeles online information company MyLife.com for allegedly using misleading billing and marketing tactics.

On behalf of the Federal Trade Commission, the DOJ alleges that the company deceived consumers with “teaser background reports'' that falsely claimed to include information about arrest, criminal, and sex offender records.

According to the complaint filed in Los Angeles federal court, MyLife.com and its CEO, Jeffrey Tinsley, have stated through their website that the company's background reports on certain people may contain arrest, criminal and sexual offender records -- even when they did not actually include such information -- to try to persuade consumers to sign up for auto-renewing premium subscriptions.

The complaint alleges that, in many instances, consumers searching the MyLife website for a background report are shown search results that imply, often falsely, that the subject of a search may have records of criminal or sexual offenses -- records that can be viewed only by buying a subscription. The complaint alleges that MyLife's misleading statements led some consumers to believe they or other individuals had arrest or criminal records when they did not, or if they only had minor traffic citations.

MyLife is a consumer reporting agency, assembling and selling consumer reports that include information such as court or arrest records and sex offender records.

The complaint alleges the company skirted its obligations under the Fair Credit Reporting Act by failing to make sure the information it sold was accurate and was used only for legally permissible purposes, and failing to tell users about their obligations under the FCRA, including the requirement to notify consumers if the user took an adverse action against them based on information in the report. Inaccurate information in a consumer report can cost a consumer a job, housing, or even a loan.

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