The Federal Trade Commission (FTC) announced that it is launching an inquiry into the small business credit reporting industry. Specifically, it is ordering five firms to provide detailed information about their products and processes.

According to the FTC, the impetus for this inquiry is that unlike consumer reports, which are governed by the Fair Credit Reporting Act, there is no federal law that specifically outlines processes and protections for small businesses credit reporting. The FTC says this can cause confusion, particularly for small businesses attempting to correct errors or omissions. According to the FTC, “[s]ometimes small businesses only discover they have a credit report when they are denied credit by a supplier.”

The orders issued to the five firms require them to provide:

  • Their processes for gathering, generating, and organizing data related to small businesses.
  • The steps taken to ensure that the information contained in the credit reports is accurate.
  • The number of data contributors with which they currently have data contribution agreements and the steps taken to ensure the data provided is accurate.
  • All business credit scores that are included in their reports, and the factors, information, and data included in arriving at each business credit score.
  • Any algorithms, machine learning, or other automated systems that are used in relation to the business credit report data.
  • All free-of-charge services available for entities to view their own report or information.
  • Information about credit monitoring products that they sell, including sales revenue.
  • Information about marketing materials used to sell small business credit reports, including gross sales revenue.
  • Any practices or product features to provide updates or corrections to business report customers in situations where information about an entity is corrected after the report is obtained.

The firms will have 60 days after service to respond with the requested information and documents.

Photo of David N. Anthony David N. Anthony

David Anthony handles litigation against consumer financial services businesses and other highly regulated companies across the United States. He is a strategic thinker who balances his extensive litigation experience with practical business advice to solve companies’ hardest problems.

Photo of Chris Capurso Chris Capurso

Chris focuses his practice on consumer financial services compliance, guiding clients through the many federal and state laws and regulations that impact consumer credit programs.

Photo of Mark Furletti Mark Furletti

Mark helps clients navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small business, particularly in connection with credit, deposit, and payments products. He is a trusted advisor, providing practical legal counsel and advice to providers of financial

Mark helps clients navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small business, particularly in connection with credit, deposit, and payments products. He is a trusted advisor, providing practical legal counsel and advice to providers of financial services across numerous industries.

Photo of Ethan G. Ostroff Ethan G. Ostroff

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their

Ethan’s practice focuses on financial services litigation and compliance counseling, as well as digital assets and blockchain technology. With a long track record of successful litigation results across the U.S., both bank and non-bank clients rely on him for comprehensive advice throughout their business cycle.

Photo of Caleb Rosenberg Caleb Rosenberg

Caleb is counsel in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small…

Caleb is counsel in the firm’s Consumer Financial Services Practice Group. He focuses his practice on helping federal and state-chartered banks, fintech companies, finance companies, and licensed lenders navigate regulatory risks posed by state and federal laws aimed at protecting consumers and small businesses in the credit and alternative finance products industry.