TransUnion, Equifax Fined by CFPB for Deceiving Consumers
Credit reporting agencies TransUnion and Equifax were fined by the Consumer Financial Protection Bureau today for deceiving consumers about the usefulness and actual cost of credit scores they sold. The CFPB felt these credit reporting agencies were encouraging consumers to sign up for expensive recurring payments under false claims.
The CFPB originally launched a TransUnion investigation in September 2015. TransUnion was fined a total of $16.9 million: $13.9 million will be dispersed to eligible customers who may have been affected by the practices in question, and $3 million goes to the CFPB civil penalty fund. In addition, the company set aside another $2.5 million to cover the cost of legal fees and other compliance expenses.
In addition to paying the fines, TransUnion has agreed to adjust its advertising practices to help consumers better understand what services they are receiving (what is included with their credit scores, credit monitoring, etc.). The company must also request a consumer’s consent for a product that is on a recurring billing cycle after a free trial period. All of this and other modifications to company practices must be outlined in a “comprehensive compliance plan” that the CFPB will review.
Equifax was fined a total of $6.3 million: $3.8 million will go to affected consumers, and $2.5 million to the CFPB’s civil penalty fund.
The most recent Monthly Complaint Report from the CFPB showed that Equifax received more complaints than any of the three major credit reporting agencies. Over the last three months, Equifax had 1,458 complaints issued against them and Experian had 1,247. TransUnion had 1,207.