CFPB Fines Experian $3 Million for Deceptive Marketing Practices
The Consumer Financial Protection Bureau fined Experian $3 million for creating misleading ads about the way their credit scores were used. Experian told consumers the scores they marketed were used to determine credit worthiness, when in reality, those scores were only meant to be a tool to help people track their credit.
Credit scores from Experian, TransUnion and Equifax are used in the lending review process. Most lenders will look at multiple credit scores and credit history reports before deciding whether to offer someone a loan. These are not the scores in question though.
Experian developed a program called PLUS Score that shows consumers an estimated credit score based on their open accounts and payment histories. The PLUS Score is only an “educational” credit score, not a reference point for lenders. The CFPB has ordered Experian to adjust its marketing strategies to accurately reflect the nature of PLUS Score, in addition to paying the $3 million civil penalty.
At minimum, Experian violated the Consumer Protection Act between 2012 and 2014. The CFPB is continuing to investigate this issue to see if the false advertising extended beyond that timeframe. Experian also violated the Fair Credit Reporting Act by putting advertisements on their “free” credit reports through AnnualCreditReport.com. Consumers are supposed to have access to a completely free credit report from each bureau once every 12 months. The existence of these ads goes against that regulation.