The Consumer Financial Protection Bureau Orders TransUnion and Equifax to pay for deceptive practices in marketing credit scores. TransUnion and Equifax violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act. The violations occurred because of deception. Transunion and Equifax advertised that the scores they sold to consumers were the same scores lenders used to make lending decisions.
Both credit-reporting agencies also used deceptive tactics by enrolling consumers into “free credit monitoring.” However, “free” only lasted for 30 days and consumers paid monthly for a subscription service. Consumers, who did not services cancel during the 30 day monitoring period, were charged each month.
Equifax also violated the Fair Credit Reporting Act (FCRA). According the FCRA, a credit bureau is required to furnish a free credit report to a consumer once every 12 months. Before receiving their free credit report, Equifax advertised on AnnualCreditReport.com. Advertising, when a consumer receives their free report, is prohibited.
Because of the deceptive practices, TransUnion and Equifax Must:
- Pay more than 17.6 million in total restitution to harmed consumers.
- Truthfully represent the usefulness of credit scores it sells.
- Obtain the express informed consent of consumers before enrolling them in credit-related products.
- Provide an easy way to cancel services for credit-related products.
- Pay 5.5 million in total penalties to the Bureaus’ civil penalty fund
You can view the consent order, in it’s entirety here: http://files.consumerfinance.gov/f/documents/201701_cfpb_Transunion-consent-order.pdf