A federal agency has ordered two credit reporting agencies to pay more than $23.2 million in restitution to consumers and fines for deceptively marketing credit scores and credit products to consumers.
Among the charges that the Consumer Financial Protection Bureau levied against Equifax and TransUnion: That the two companies led consumers to believe they "signed up for a free or a one-dollar trial when the agencies actually enrolled them in a subscription program."
The violations allegedly occurred between 2011 and 2014.
TransUnion will repay $13.93 million to consumers and pay a $3 million fine, while Equifax will reimburse $3.8 million and pay a $2.5 million fine.
Both companies also said they would modify their marketing practices.
The CFPB warns consumers that a credit score being provided by a company or sold "may not be the same score that is used by lenders and insurers in making credit" decisions. In fact, consumers have more than one credit score.
Both companies issued statements responding to the CFPB's action:
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TransUnion:
"TransUnion has reached a settlement with the Consumer Financial Protection Bureau (CFPB) that brings to a close for TransUnion the CFPB’s industry-wide review of credit reporting agencies’ direct-to-consumer marketing practices.
"We continue to believe that our consumer marketing has been clear and has complied with the law and other government guidance. Our trial credit monitoring service has given consumers low-cost access to their credit report and credit score and allowed them to conveniently cancel monitoring services at any time online or by phone.
"However, we are committed to making improvements to our consumer experience, and over the past several months we have worked cooperatively with the CFPB to be the industry leader in designing the enhanced, voluntary marketing disclosures that go beyond the current legal and regulatory requirements to which we agreed as part of this settlement. In addition, we have agreed to fund a generous program to fully compensate any consumer who may not have understood that his or her trial program would convert to a subscription. In the coming months, TransUnion and the CFPB will agree on a process and timeline for identifying eligible consumers, calculating payment amounts and making payments to those consumers.
"As always, we remain committed to providing consumers with access to information about their credit that can help them make informed financial decisions."
Equifax:
"Equifax Inc. reached an agreement with the Consumer Financial Protection Bureau (CFPB) regarding the CFPB’s allegations that Equifax used deceptive marketing and advertising practices in the sale of certain products. The amount of the settlement, which covers a period from July 2011 through March 2014, requires the payment of $3.8 million in consumer restitution plus $2.5 million in civil money penalties. In addition, Equifax has agreed to modify certain marketing practices. The CFPB’s investigation into these matters has been ongoing for nearly three years, and Equifax implemented changes addressing the CFPB’s concerns shortly after the investigation began. While Equifax does not believe it has violated any laws and has not admitted any liability, Equifax determined it was in its best interest to resolve the matter with the CFPB. Equifax remains committed to providing products and services that educate and alert consumers about their credit and identity and ensuring transparency and clarity about the value of those products and services."
