Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

U.S. fines TransUnion, Equifax for deceit over credit scores

Published 01/03/2017, 04:32 PM
Updated 01/03/2017, 04:32 PM
© Reuters. A coffee shop displays signs for Visa, MasterCard and Discover in Washington

© Reuters. A coffee shop displays signs for Visa, MasterCard and Discover in Washington

By Jonathan Stempel and Lisa Lambert

(Reuters) - A U.S. regulator on Tuesday ordered credit reporting agencies TransUnion (N:TRU) and Equifax Inc (N:EFX) to pay more than $23.2 million in fines and restitution for deceiving consumers about the usefulness and cost of credit scores they bought.

The U.S. Consumer Financial Protection Bureau said the payments also resolve charges that TransUnion and Equifax lured consumers into enrolling in credit services advertised as free or costing only $1, but which could cost more than $200 a year.

TransUnion will reimburse $13.93 million to consumers and pay a $3 million civil fine, while Equifax will reimburse $3.8 million and pay a $2.5 million civil fine, the CFPB said.

Both companies will also modify their marketing practices, including by obtaining consent to enroll in credit-related services where fees kick in after free trials, and making it easier for consumers to cancel products they do not want.

The CFPB said the wrongful conduct had occurred at TransUnion since July 2011 and at Equifax between July 2011 and March 2014, and violated the Dodd-Frank financial reform law.

Many lenders rely on credit scores from TransUnion, Equifax and rival Experian when lending money.

But the CFPB said TransUnion and Equifax falsely represented that the credit scores they sold to consumers were the same scores that lenders used.

"Credit scores are central to a consumer's financial life and people deserve honest and accurate information about them," CFPB Director Richard Cordray said in a statement.

Neither Chicago-based TransUnion nor Atlanta-based Equifax admitted or denied wrongdoing.

TransUnion spokesman David Blumberg and Equifax spokeswoman Ines Gutzmer said their respective companies believe they have complied with applicable laws, and are committed to better educating consumers about their credit.

Experian was not charged. A spokesman for the CFPB had no immediate additional comment.

TransUnion, Equifax and Experian are among the 10 companies about which the CFPB receives the most consumer complaints. Several large banks and mortgage lenders are also on that list.

© Reuters. A coffee shop displays signs for Visa, MasterCard and Discover in Washington

In 2015, the credit reporting agencies agreed to improve how they fix mistakes and address disputes, under a separate settlement with 31 state attorneys general.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.