A home security and monitoring company has agreed to pay $20 million to settle Federal Trade Commission charges it misused credit reports to help unqualified customers obtain financing for the company’s products and services, the agency said Thursday.

The FTC said Provo, Utah-based Vivint Smart Homes Inc. has agreed to pay a $15 million civil penalty and an additional $5 million to compensate injured customers.

The company said in a statement it has changed its practices.

The FTC charged that Vivint violated the Fair Credit Reporting Act by improperly obtaining credit reports to qualify potential customers for financing for its smart home monitoring and security products.

It said it also violated the FTC’s “red flags” rule by failing to implement an identity theft prevention program, which is required of certain companies that regularly use or obtain credit reports. 

The FTC said some of Vivint’s sales representations, who work door to door and on a commission-only basis, used a process known as “white paging,” which involved finding another consumer with the same or similar name on the White Pages app, and using that consumer’s credit history to qualify the prospective unqualified customers. 

Sales representatives sometimes also asked customers for the name of someone with better credit, such as a relative, then added that party as a co-signer to the account without their permission.

If these customers later defaulted on the loans, Vivint referred them to this debt buyer, subjecting them to debt collectors, the FTC said.

The FTC said Vivint terminated many sales representatives for misconduct, only to rehire some of them shortly afterward.

The settlement also requires Vivint to implement an employee monitoring and training program, among other provisions.

The company said in a statement, “We are pleased to have resolved this matter related to certain historical practices.

“We had already taken steps before the FTC began its review to strengthen our compliance policies, and will continue to make this a focus going forward.

“We are deeply committed to operating with integrity and delivering exceptional service to our customers.”