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Kohl’s agrees to pay $220,000 for identity-theft allegations (UPDATE)

Kohl’s agrees to pay $220,000 for identity-theft allegations (UPDATE)

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Kohl’s Department Stores have agreed to pay a civil penalty of $220,000 to settle Federal Trade Commission allegations that it withheld information about identity theft perpetrators.

The DOJ filed a complaint and corresponding settlement on behalf of the FTC in the U.S. District Court Eastern District of Wisconsin on Monday accusing the retailer of violating parts of the Federal Trade Commission Act and the Fair Credit Reporting Act.

The complaint centered on Kohl’s policy on responding to requests related to Kohls.com orders from victims of identity theft. Before February 2017, Kohl’s would provide application and business-transaction records to victims within 30 days of the receipt of a request and following proper verification.

According to the complaint, Kohl’s changed this policy in February 2017 in a way that allowed it to provide information identifying identity thieves only to law-enforcement officials or victims’ attorneys upon direct request. The retailer went on to modify its policy a second time, in 2018, a change the complaint argued allowed only law enforcement to request such information.

Several victims sent Kohl’s the language of the FCRA, according to the complaint, but Kohl’s still didn’t change its policy until April 2019, when it went back to providing victims with the requested records.

“Kohl’s knowingly engaged in its unlawful acts and practices for more than two years (February 2017 through March 2019), Kohl’s continued its unlawful acts or practices despite knowledge of numerous complaints from victims of identity theft, and Kohl’s only stopped its unlawful conduct six months after it received a Civil Investigative Demand from the FTC,” the complaint said.

In addition to the civil penalty resulting from the settlement, Kohl’s is required to provide identity theft victims access to business transaction records within 30 days, post a notice on its website informing identity-theft victims about how to obtain records related to identity theft and certify that it has reached out to victims who were unlawfully denied access to such records.

An FTC press release said this is the first case the commission has brought using its authority under Section 609(e) of the FCRA.

In an email, Kohl’s spokeswoman Melanie Reynolds said the company has coordinated with the Federal Trade Commission to take measures to address the concerns and revise policies accordingly.

“In February 2020, Kohl’s followed-up with approximately 50 Kohl’s customers to resolve any outstanding requests,” Reynolds said. “We believe the matter has been transparently addressed to resolution.”

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