CFPB Fined Equifax and TransUnion $23 Million+
Equifax and TransUnion, two major credit reporting bureaus in the United States, have been fined by the Consumer Financial Protection Bureau (CFPB) for falsely representing credit scores and luring consumers into paid subscriptions. The bureaus’ combined restitutions and fines top $23 Million total.
TransUnion was ordered to reimburse $13.93 Million to consumers and pay an additional $3 Million civil fine. Equifax was ordered to reimburse $3.8 Million and pay a $2.5 Million civil fine. The CFPB alleged that the bureaus wrongfully deceived consumers by misrepresenting credit scores provided, that were different than the scores used by financial firms to make lending decisions. TransUnion and Equifax were also unclear about the price structure of their services, advertising them as free and then enrolling consumers into subscription plans that cost $16/month.
CFPB Director Richard Cordray said, “credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them.” The CFPB reports that the faulty practices date back to July 2011 for TransUnion and March 2014 for Equifax.
Equifax, TransUnion, and their competitor Experian are the most widely accepted credit bureaus by lenders nationwide. In addition to the hefty fines, both companies will be revising their marketing practices to more accurately depict the cost of the services provided.
Sources: CNBC, Washington Post, LA Times