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Case 2:21-cv-00267-DAK Document 3-1 Filed 04/29/21 PageID.22 Page 1 of 21
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`BRIAN M. BOYNTON, Acting Assistant Attorney General, Civil Division
`MICHAEL D. GRANSTON, Deputy Assistant Attorney General
`GUSTAV W. EYLER, Director, Consumer Protection Branch
`LISA K. HSIAO, Assistant Director
`ALISHA M. CROVETTO, Trial Attorney
`Consumer Protection Branch
`Civil Division
`U.S. Department of Justice
`450 5th Street, N.W.
`Washington, DC 20530
`Telephone: (202) 305-7196
`alisha.m.crovetto@usdoj.gov
`
`
`THE UNITED STATES DISTRICT COURT
`DISTRICT OF UTAH
`
`
`
`
`Case No. 2:21-cv-00267-TS
`
`STIPULATED ORDER FOR
`PERMANENT INJUNCTION AND
`CIVIL PENALTY JUDGMENT
`
`Judge Ted Stewart
`
`Plaintiff,
`
`
`
`v.
`
`
`
`UNITED STATES OF AMERICA,
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`
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`
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`VIVINT SMART HOME, INC., a corporation,
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`
`
`
`
`Defendant.
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`Plaintiff, the United States of America, acting upon notification and authorization to the
`
`Attorney General by the Federal Trade Commission (“FTC” or “Commission”), filed its
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`Complaint for Civil Penalties, Permanent Injunction and Other Equitable Relief (“Complaint”),
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`pursuant to Sections 13(b) and 16(a)(1) of the Federal Trade Commission Act (“FTC Act”), 15
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`U.S.C. §§ 53(b) and 56(a)(1), and Section 621(a) of the Fair Credit Reporting Act (“FCRA”), 15
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`U.S.C. § 1681s(a). Defendant has waived service of the summons and the Complaint. Plaintiff
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`and Defendant stipulate to the entry of this Stipulated Order for Permanent Injunction and Civil
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`1
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`Penalty Judgment (“Order”) to resolve all matters in dispute in this action, and including
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`potential action by the Plaintiff under § 19(a)(2) of the FTC Act, between them.
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`THEREFORE, IT IS ORDERED as follows:
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`This Court has jurisdiction over this matter.
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`FINDINGS
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`The Complaint charges that Defendant participated in acts or practices in violation of
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`1.
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`2.
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`Section 5 of the FTC Act, 15 U.S.C. § 45, the FCRA, 15 U.S.C. §§ 1681–1681x, and the Duties
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`Regarding the Detection, Prevention, and Mitigation of Identity Theft (“Red Flags Rule”), 16
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`C.F.R. § 681, issued pursuant to Section 615(e) of the FCRA, 15 U.S.C. §1681m(e).
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`3.
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`Defendant neither admits nor denies any of the allegations in the Complaint, except as
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`specifically stated in this Order. Only for purposes of this action, Defendant admits the facts
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`necessary to establish the Court’s jurisdiction.
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`4.
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`Defendant waives any claim that it may have under the Equal Access to Justice Act, 28
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`U.S.C. § 2412, concerning the prosecution of this action through the date of this Order, and
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`agrees to bear its own costs and attorney fees.
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`5.
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`Defendant and Plaintiff waive all rights to appeal or otherwise challenge or contest the
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`validity of this Order.
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`DEFINITIONS
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`For the purpose of this Order, the following definitions apply:
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`A.
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`“Consumer Report” means any written, oral, or other communication of any
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`information by a Consumer Reporting Agency bearing on a consumer’s credit worthiness, credit
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`standing, credit capacity, character, general reputation, personal characteristics, or mode of living
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`which is used or expected to be used or collected in whole or in part for the purpose of serving as
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`a factor in establishing the consumer’s eligibility for (1) credit or insurance to be used primarily
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`for personal, family, or household purposes; (2) employment purposes; or (3) any other purpose
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`authorized under FCRA Section 604, 15 U.S.C. § 1681b.
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`B.
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`“Consumer Reporting Agency” or “CRA” means any person which, for monetary fees,
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`dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of
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`assembling or evaluating consumer credit information or other information on consumers for the
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`purpose of furnishing Consumer Reports to third parties, and which uses any means or facility of
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`interstate commerce for the purpose of preparing or furnishing Consumer Reports.
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`C.
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` “Defendant” means Vivint Smart Home, Inc., a Delaware corporation, and its
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`successors and assigns.
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`D.
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` “White Paging” means qualifying potential customers for financing by utilizing the
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`credit history of an unrelated individual with a same or similar name, without that individual’s
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`express written permission.
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`E.
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`“Impermissible Co-Signing” means adding individuals on an account without their
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`express written permission.
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`ORDER
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`I.
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`PROHIBITED BUSINESS ACTIVITIES
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`IT IS ORDERED that Defendant, Defendant’s officers, agents, employees, and attorneys,
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`and all other persons in active concert or participation with any of them, who receive actual
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`notice of this Order, whether acting directly or indirectly, in connection with promoting or
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`offering for sale any good or service, are permanently restrained and enjoined from failing to
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`3
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`establish and maintain a written Identity Theft Prevention Program (“ITP Program”) that is
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`designed to detect, prevent, and mitigate identity theft in connection with “Covered Accounts” in
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`contravention of 16 C.F.R. § 681.1 (“Red Flags Rule”), including, but not limited to:
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`A.
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`Failing to conduct periodic assessments to determine whether the Defendant offers
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`“Covered Accounts” within the meaning of the Red Flags Rule;
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`B.
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`Failing to administer the ITP Program in accordance with the Red Flags Rule, including
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`obtaining approval for the ITP Program from the board of directors; and
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`C.
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`Failing to consider and include in the ITP Program all appropriate guidelines provided in
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`Appendix A to the Red Flags Rule.
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`II.
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`ADDITIONAL PROHIBITED BUSINESS ACTIVITIES
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`IT IS FURTHER ORDERED that Defendant, Defendant’s officers, agents, employees,
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`and attorneys, and all other persons in active concert or participation with any of them, who
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`receive actual notice of this Order, whether acting directly or indirectly, in connection with
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`promoting or offering for sale any good or service, are permanently restrained and enjoined
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`from: (1) obtaining Consumer Reports from CRAs without a permissible purpose in
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`contravention of Section 604(f) of the FCRA (15 U.S.C. § 1681b(f)); (2) selling, transferring, or
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`placing for collection any debt on an account on which it knows or has reason to believe that
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`White Paging or Impermissible Co-Signing has occurred; and (3) furnishing information about
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`such debt to the CRAs.
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`III. CUSTOMER SERVICE TASK FORCE
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`IT IS FURTHER ORDERED that, within thirty (30) days of entry of this Order,
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`Defendant must establish and maintain for five years, a Customer Service Task Force Program.
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`To satisfy this requirement, Defendant must, at a minimum:
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`A.
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`Designate a qualified employee to coordinate and be responsible for the Customer
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`Service Task Force (“Coordinator”), who must be approved by and report directly to the board of
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`directors or a committee thereof;
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`B.
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`For all debt sold to a debt buyer between January 1, 2016 and the entry of this Order, for
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`all accounts whose file references more than one address or includes a co-signer, and prior to
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`(1) attempting to collect any debt, (2) referring any account to a debt collector, (3) selling any
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`debt to a debt buyer, or (4) reporting any debt to a consumer reporting agency (CRA), take
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`reasonable steps to verify every name and address included with the account to confirm that the
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`individual is properly included within the account, and require the Coordinator to certify, under
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`penalty of perjury, that those reasonable steps were taken for each such account.
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`C.
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`On the homepage of Vivint.com, provide a prominent link to a dedicated Identity Theft
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`Customer Service page, which will have contact information (including telephone, e-mail
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`address, and physical mail address), for consumers to use to provide notice to Defendant of any
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`identity theft associated with a Vivint account, including but not limited to identity theft
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`associated with White Paging or Impermissible Co-Signing.
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`D.
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`Upon receipt of any notice described in Provision III.C above, through any means,
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`immediately suspend any effort to collect any debt on that account, from any individual
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`associated with the account, for no less than sixty (60) days. For accounts that were already
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`referred to or sold to a third-party, Defendant must immediately demand that such third-party
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`suspend collection for at least sixty (60) days. For any sale of debt to a third-party debt buyer or
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`debt collector after the date of this order, Defendant must have contractual provisions requiring
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`such third party to comply with such suspension demand.
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`E.
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`For any account for which Defendant has received Provision III.C notice of identity theft
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`take reasonable steps, within sixty (60) days, to investigate the claim, including, but not limited
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`to: (1) interview the claimed identity theft victim; (2) interview the sales representative that
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`initiated the account (if the representative is a current employee and otherwise make reasonable
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`efforts to contact a former employee); and (3) review all documentation associated with the
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`account.
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`F.
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`For debts determined to be illegitimate, either through a Provision III.B verification or
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`Provision III.E investigation, (1) if any debts were reported to any CRA, immediately
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`communicate to that CRA that the debt was illegitimate, and take reasonable steps to confirm
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`that that the CRA removes any indication of the debt from the consumer, (2) for any debts that
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`were sold or referred to any debt buyer or debt collector, promptly communicate to the debt
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`buyer or debt collector that the debt was illegitimate, confirm that the debt buyer or debt
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`collector will immediately stop all attempts to collect that debt, and repurchase the debt,
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`(3) provide notice to the individuals associated with the debt of the availability of monetary relief
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`pursuant to Provision X below, and (4) for any active accounts determined to have been
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`authorized through White Paging or Impermissible Co-Signing, immediately remove any
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`reference to those third parties on the accounts.
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`G.
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`For debts determined to be legitimate, prior to resuming collection after sixty (60) days
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`or, in the case of accounts already referred to or sold to a third-party, prior to authorizing
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`resumption of debt collection, require the Coordinator to certify, under penalty of perjury, that a
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`Provision III.B verification or Provision III.E investigation has occurred and that the Coordinator
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`believes the individual named on the account is properly associated with the debt.
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`IV.
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`EMPLOYEE MONITORING PROGRAM
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`IT IS FURTHER ORDERED that Defendant, beginning 30 days after entry of this Order,
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`must not promote or offer for sale any good or service unless it establishes and implements, and
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`thereafter maintains, an employee-monitoring program that prevents Defendant’s employees or
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`agents from obtaining Consumer Reports from CRAs without a permissible purpose
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`(“Monitoring Program”). To satisfy this requirement, Defendant must, at a minimum:
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`A.
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`Document in writing the content, implementation, and maintenance of the Monitoring
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`Program;
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`B.
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`Provide the written program and any evaluations thereof or updates thereto to
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`Defendant’s board of directors or governing body or, if no such board or equivalent governing
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`body exists, to Defendant’s senior officer responsible for the Monitoring Program at least once
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`every 12 months;
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`C.
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`Designate a qualified employee or employees to coordinate and be responsible for the
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`Monitoring Program, who will be approved by and report directly to the board of directors or a
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`committee thereof;
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`D.
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`Assess and document, at least once every 12 months, internal and external risks that may
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`facilitate employee access to Consumer Reports without a permissible purpose;
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`E.
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`Design, implement, maintain and document safeguards that control for the risks
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`Defendant identifies related to employee access to Consumer Reports without a permissible
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`purpose. Such safeguards must include:
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`1.
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`Training of all of Defendant’s sales employees and agents, at onboarding and at
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`least every 12 months thereafter, on the FCRA’s legal requirements with respect to lawful access
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`to Consumer Reports and activities that would violate those requirements;
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`2.
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`Technical safeguards such as modifying Defendant’s sales technologies
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`(including but not limited to Street Genie) designed to prevent sales employees and agents from
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`improperly obtaining Consumer Reports from CRAs;
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`3.
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`An internal “ethics hotline” or similar mechanism to which sales employees and
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`agents must report any sales integrity issues, including potential violations of the FCRA, along
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`with a system for receiving, retaining, and addressing such employee allegations;
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`4.
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`Escalating sales employee and agent disciplinary measures for FCRA violations
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`and failure to report FCRA violations, up to and including termination; and
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`5.
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`Review and modification, at least once every 12 months, of Defendant’s sales
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`goals, performance management and sales employee and agent compensation to ensure all are
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`consistent with the objective of preventing FCRA violations; and
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`F.
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`Evaluate and adjust the Monitoring Program in light of any changes to Defendant’s
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`operations or business arrangements, or any other circumstance that Defendant knows or has
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`reason to know may have an impact on the Monitoring Program’s effectiveness. At a minimum,
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`Defendant must evaluate the Monitoring Program every 12 months and implement modifications
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`based on the results.
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`V.
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`THIRD PARTY ASSESSMENT
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`IT IS FURTHER ORDERED that, in connection with compliance with Provisions I-IV of
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`this Order, Defendant must obtain initial and biennial assessments (“Assessments”) as described
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`below:
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`A.
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`The Assessments must be obtained from a qualified, objective, independent third-party
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`professional (“Assessor”), who: (1) has specialized experience in compliance with the FCRA;
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`(2) conducts an independent review of Defendant’s Identity Theft Prevention Program (if
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`applicable), Customer Service Task Force and Employee Monitoring Program (collectively, the
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`“Programs”); and (3) retains all documents relevant to each Assessment for five years after
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`completion of such Assessment and provides such documents to the Commission within 10 days
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`of receipt of a written request from a representative of the Commission. No documents may be
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`withheld by the Assessor from the Commission on the basis of a claim of confidentiality,
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`proprietary or trade secrets, work product protection, attorney client privilege, statutory
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`exemption, or any similar claim.
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`B.
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`For each Assessment, Defendant must provide the Associate Director for Enforcement
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`for the Bureau of Consumer Protection at the Federal Trade Commission with the name and
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`affiliation of the person selected to conduct the Assessment, which the Associate Director shall
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`have the authority to approve in his or her sole discretion.
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`C.
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`The reporting period for the Assessments must cover: (1) the first 180 days after the
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`issuance date of the Order for the initial Assessment; and (2) each two-year period thereafter for
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`20 years after issuance of the Order for the biennial Assessments.
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`D.
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`Each Assessment must, for the entire Assessment period: (1) determine whether
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`Defendant has implemented and maintained the Programs; (2) assess the effectiveness of
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`Defendant’s implementation and maintenance of Provisions I-IV of this Order; (3) identify any
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`gaps or weaknesses in, or instances of material noncompliance with, the Programs; and (4)
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`identify specific evidence (including, but not limited to, documents reviewed, sampling and
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`testing performed, and interviews conducted) examined to make such determinations,
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`assessments, and identifications, and explain why the evidence that the Assessor examined is
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`sufficient to justify the Assessor’s findings. No finding of the Assessor shall rely solely on
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`assertions or attestations by Defendant’s management. The Assessment must be signed by the
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`Assessor and must state that the Assessor conducted an independent review, and did not rely
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`solely on assertions or attestations by Defendant’s management. To the extent Defendant
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`revises, updates, or adds one or more safeguards required under this Order in the middle of an
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`Assessment period, the Assessment shall assess the effectiveness of the revised, updated, or
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`added safeguard(s) for the time period in which it was in effect, and provide a separate statement
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`detailing the basis for each revised, updated, or additional safeguard.
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`E.
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`Each Assessment must be completed within 60 days after the end of the reporting period
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`to which the Assessment applies. Unless otherwise directed by the Commission representative in
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`writing, Defendant must submit the initial Assessment to the Commission within 10 days after
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`the Assessment has been completed via email to Debrief@ftc.gov or by overnight courier (not
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`the U.S. Postal Service) to Associate Director of Enforcement, Bureau of Consumer Protection,
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`Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The
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`subject line must begin: “In re Vivint Smart Home, Inc., File No. 1923060.” All subsequent
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`biennial Assessments must be retained by Defendant until the order is terminated and provided to
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`the Associate Director of Enforcement within 10 days of request.
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`VI. COOPERATION WITH THIRD-PARTY ASSESSOR
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`IT IS FURTHER ORDERED that Defendant, whether acting directly or indirectly, in
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`connection with any Assessment required by Provision V of this Order, must:
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`A.
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`Provide or otherwise make available to the Assessor all information and material in its
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`possession, custody, or control that is relevant to the Assessment for which there is no reasonable
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`claim of privilege; and
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`B.
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`Disclose all material facts to the Assessor, and not misrepresent in any manner, expressly
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`or by implication, any fact material to the Assessor’s: (1) determination whether Defendant has
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`implemented and maintained the Programs required by Provisions I-IV of this Order;
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`(2) assessment of the effectiveness of the implementation and maintenance of those Programs; or
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`(3) identification of any gaps or weaknesses in those Programs.
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`VII. OVERSIGHT REQUIREMENT
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`IT IS FURTHER ORDERED that Defendant will employ a Chief Compliance Officer,
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`who will have a reporting relationship to the Audit Committee of the Board in addition to any
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`reporting relationship the Chief Compliance Officer has to Defendant’s management. At least
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`every fiscal quarter, Defendant’s Chief Compliance Officer will report to the Board or a
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`committee thereof on management’s execution of its FCRA and identity theft risk management
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`compliance obligations and the effectiveness of Defendant’s FCRA and identity theft risk
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`management compliance functions.
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`VIII. ANNUAL CERTIFICATION
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`IT IS FURTHER ORDERED that Defendant must:
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`A.
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`For a total of twenty years and commencing one year after the issuance date of this
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`Order, and each year thereafter, Defendant must provide the Commission with a certification
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`from Defendant’s Chief Executive Officer, Todd Pedersen, or if Mr. Pedersen no longer serves
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`as Defendant’s Chief Executive Officer, President, or such other officer (regardless of title) that
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`is designated in Defendant’s Bylaws or by resolution of the Board of Directors as having the
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`duties of the principal executive officer of Defendant, then a senior corporate manager, or, if no
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`such senior corporate manager exists, a senior officer of the Defendant responsible for
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`Compliance with Provisions I-IV of this Order, that: (1) Defendant has established,
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`implemented, and maintained the requirements of this Order; and (2) Defendant is not aware of
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`any material noncompliance that has not been (a) corrected or (b) disclosed to the Commission.
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`The certification must be based on the personal knowledge of Mr. Pedersen, the senior corporate
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`manager, the senior officer, or subject-matter experts upon whom Mr. Pedersen, the senior
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`corporate manager, or the senior officer reasonably relies in making the certification.
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`B.
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`Unless otherwise directed by a Commission representative in writing, submit all annual
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`certifications to the Commission pursuant to this Order via email to DEBrief@ftc.gov or by
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`overnight courier (not the U.S. Postal Service) to Associate Director of Enforcement, Bureau of
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`Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington,
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`DC 20580. The subject line must begin: “In re Vivint Smart Home, Inc., FTC File No.
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`1923060.”
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`IX. MONETARY JUDGMENT FOR CIVIL PENALTY
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`IT IS FURTHER ORDERED that:
`
`A.
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`Judgment in the amount of fifteen million dollars ($15,000,000) is entered in favor of
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`Plaintiff against Defendant, as a civil penalty.
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`B.
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`Defendant is ordered to pay to Plaintiff, by making payment to the Treasurer of the
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`United States, fifteen million dollars ($15,000,000). Such payment must be made within seven
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`days of entry of this Order by electronic fund transfer in accordance with instructions previously
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`provided by a representative of Plaintiff.
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`X.
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`CONSUMER FUND
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`IT IS FURTHER ORDERED that:
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`A.
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`Judgment in the amount of five million dollars ($5,000,000) is entered in favor of
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`Plaintiff against Defendant, as equitable monetary relief.
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`B.
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`Defendant is ordered to pay to Plaintiff, by making payment to the Treasurer of the
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`United States, five million dollars ($5,000,000). Such payment must be made within seven days
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`of entry of this Order by electronic fund transfer in accordance with instructions previously
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`provided by a representative of Plaintiff.
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`C.
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`All money paid pursuant to this Provision X may be deposited into a fund administered
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`by the Commission or its designee to be used for equitable relief, including consumer redress and
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`any attendant expenses for the administration of any redress fund. If a representative of the
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`Commission decides that direct redress to consumers is wholly or partially impracticable or
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`money remains after redress is completed, the Commission may apply any remaining money for
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`such other equitable relief (including consumer information remedies) as it determines to be
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`reasonably related to Defendant’s practices alleged in the Complaint. Any money not used for
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`such equitable relief is to be deposited to the U.S. Treasury as additional civil penalties.
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`Defendant has no right to challenge any actions the Commission or its representatives may take
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`pursuant to this Provision X.
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`XI. ADDITIONAL MONETARY PROVISIONS
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`A.
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`Defendant relinquishes dominion and all legal and equitable right, title, and interest in all
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`assets transferred pursuant to this Order and may not seek the return of any assets.
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`B.
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`The facts alleged in the Complaint will be taken as true, without further proof, in any
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`subsequent civil litigation by or on behalf of the Commission, including in a proceeding to
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`enforce its rights to any payment or monetary judgment pursuant to this Order.
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`C.
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`Defendant acknowledges that its Taxpayer Identification Number, which Defendant
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`previously submitted to the Commission, may be used for collecting and reporting on any
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`delinquent amount arising out of this Order, in accordance with 31 U.S.C. § 7701.
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`XII. CUSTOMER INFORMATION
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`IT IS FURTHER ORDERED that Defendant, Defendant’s officers, agents, employees,
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`and attorneys, and all other persons in active concert or participation with any of them, who
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`receive actual notice of this Order, whether acting directly or indirectly, in connection with
`
`promoting or offering for sale any good or service are permanently restrained and enjoined from
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`directly or indirectly failing to provide sufficient customer information, as requested by the
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`Commission, to enable the Commission to efficiently administer consumer redress in accordance
`
`with Provision X above. If a representative of the Commission requests in writing any
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`information related to redress, Defendant must provide it, in the form prescribed by the
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`Commission, within 14 days.
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`XIII. ORDER ACKNOWLEDGMENTS
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`IT IS FURTHER ORDERED that Defendant obtains acknowledgments of receipt of this
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`Order:
`
`A.
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`Defendant, within seven days of entry of this Order, must submit to the Commission an
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`acknowledgment of receipt of this Order sworn under penalty of perjury.
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`B.
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`For ten years after entry of this Order, Defendant must deliver a copy of this Order to:
`
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`(1) all principals, officers, directors, and LLC managers and members; (2) all employees having
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`managerial responsibilities for conduct related to the subject matter of the Order and all agents
`
`and representatives who participate in conduct related to the subject matter of the Order; and (3)
`
`any business entity resulting from any change in structure as set forth in Provision XIV of this
`
`Order. Delivery must occur within seven days of entry of this Order for current personnel. For
`
`all others, delivery must occur before they assume their responsibilities.
`
`C.
`
`From each individual or entity to which Defendant delivered a copy of this Order,
`
`Defendant must obtain, within 30 days, a signed and dated acknowledgment of receipt of this
`
`Order.
`
`XIV. COMPLIANCE REPORTING
`
`IT IS FURTHER ORDERED that Defendant make timely submissions to the
`
`Commission:
`
`A.
`
`One year after entry of this Order, Defendant must submit a compliance report, sworn
`
`under penalty of perjury, in which Defendant must: (a) identify the primary physical, postal, and
`
`email address and telephone number, as designated points of contact, which representatives of
`
`the Commission and Plaintiff may use to communicate with Defendant; (b) identify all of
`
`Defendant’s businesses by all of their names, telephone numbers, and physical, postal, email, and
`
`Internet addresses; (c) describe the activities of each business, including the goods and services
`
`offered, and the means and method of sales; (d) describe in detail whether and how Defendant is
`
`in compliance with each provision of this Order; and (e) provide a copy of each Order
`
`Acknowledgment obtained pursuant to this Order, unless previously submitted to the
`
`Commission.
`
`
`
`15
`
`

`

`Case 2:21-cv-00267-DAK Document 3-1 Filed 04/29/21 PageID.37 Page 16 of 21
`
`
`
`B.
`
`For ten years after entry of this Order, Defendant must submit a compliance notice, sworn
`
`under penalty of perjury, within 14 days of any change in the following Defendant must report
`
`any change in: (a) any designated point of contact; or (b) the corporate structure of Defendant
`
`that may affect compliance obligations arising under this Order, including: creation, merger, sale,
`
`or dissolution of the entity or any subsidiary, parent, or affiliate that engages in any acts or
`
`practices subject to this Order.
`
`C.
`
`Defendant must submit to the Commission notice of the filing of any bankruptcy petition,
`
`insolvency proceeding, or similar proceeding by or against Defendant within 14 days of its filing.
`
`D.
`
`Any submission to the Commission required by this Order to be sworn under penalty of
`
`perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by concluding: “I
`
`declare under penalty of perjury under the laws of the United States of America that the
`
`foregoing is true and correct. Executed on: _____” and supplying the date, signatory’s full
`
`name, title (if applicable), and signature.
`
`E.
`
`Unless otherwise directed by a Commission representative in writing, all submissions to
`
`the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by overnight
`
`courier (not the U.S. Postal Service) to Associate Director for Enforcement, Bureau of Consumer
`
`Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580.
`
`The subject line must begin: “In re Vivint Smart Home, Inc., FTC File No. 1923060.”
`
`XV. RECORDKEEPING
`
`IT IS FURTHER ORDERED that Defendant must create certain records for ten years
`
`after entry of the Order, and retain each such record for five years. Specifically, in connection
`
`with promoting or offering for sale any good or service, Defendant must create and retain the
`
`
`
`16
`
`

`

`Case 2:21-cv-00267-DAK Document 3-1 Filed 04/29/21 PageID.38 Page 17 of 21
`
`
`
`following records:
`
`A.
`
`B.
`
`Accounting records showing the revenues from all goods or services sold;
`
`Personnel records showing, for each person providing services, whether, as an employee
`
`or otherwise, that person’s name, addresses, telephone numbers, job title or position, dates of
`
`service, and (if applicable) the reason for termination;
`
`C.
`
`Records of all consumer complaints and refund requests, whether received directly or
`
`indirectly, such as through a third party, and any response;
`
`D.
`
`E.
`
`All employee training materials concerning the subject matter of the Order; and
`
`All records necessary to demonstrate full compliance with each provision of this Order,
`
`including all submissions to the Commission.
`
`XVI. COMPLIANCE MONITORING
`
`IT IS FURTHER ORDERED that, for the purpose of monitoring Defendant’s compliance
`
`with this Order:
`
`A. Within 14 days of receipt of a written request from a representative of the Commission or
`
`Plaintiff, Defendant must: submit additional compliance reports or other requested information,
`
`which must be sworn under penalty of perjury; appear for depositions; and produce documents
`
`for inspection and copying. The Commission and Plaintiff are also authorized to obtain
`
`discovery, without further leave of court, using any of the procedures prescribed by Federal
`
`Rules of Civil Procedure 29, 30 (including telephonic depositions), 31, 33, 34, 36, 45, and 69.
`
`B.
`
`For matters concerning this Order, the Commission and Plaintiff are authorized to
`
`communicate directly with Defendant. Defendant must permit representatives of the
`
`Commission and Plaintiff to interview any employee or other person affiliated with Defendant
`
`
`
`17
`
`

`

`Case 2:21-cv-00267-DAK Document 3-1 Filed 04/29/21 PageID.39 Page 18 of 21
`
`
`
`who has agreed to such an interview. The person interviewed may have counsel present.
`
`C.
`
`The Commission and Plaintiff may use all other lawful means, including posing, through
`
`its representatives, as consumers, suppliers, or other individuals or entities, to Defendant or any
`
`individual or entity affiliated with Defendant, without the necessity of identification or prior
`
`notice. Nothing in this Order limits the Commission’s lawful use of compulsory process,
`
`pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49, 57b-1.
`
`XVII. RETENTION OF JURISDICTION
`
`IT IS FURTHER ORDERED that this Court retains jurisdiction of this matter for
`
`purposes of construction, modification, and enforcement of this Order.
`
`
`
`
`
`SO ORDERED this day of , 2021.
`
`
`
`
`
`
`
`
`
`
`
`
`TED STEWART
`United States District Judge
`
`
`
`
`
`
`
`
`18
`
`

`

`Case 2:21-cv-00267-DAK Document 3-1 Filed 04/29/21 PageID.40 Page 19 of 21
`
`
`
`SO S

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