Credit report

CFPB sues TransUnion for monitoring credit reports

The Consumer Financial Protection Bureau announced that it has sued TransUnion and its subsidiaries, alleging deceptive marketing to consumers seeking a free credit report.

The CFPB accuses TransUnion of “deceptive digital dark schemes” to take advantage of consumers who sought out a free credit report and then tricked them into signing up for expensive credit monitoring. Dark schemes are hidden tricks or trapdoors that companies can embed into websites to trick consumers into clicking on links, subscribing or buying products, according to the CFPB.

TransUnion is a parent company of one of the three largest credit reporting agencies in the country. It collects consumer credit information from 200 million people, including borrower payment histories, indebtedness, maximum credit limits, and more. In addition to providing consumers with access to their credit reports, it also markets, sells and provides credit-related products through its subsidiaries.

TransUnion’s credit monitoring division reportedly reported $546 million in gross revenue in 2021, a 6.4% year-over-year increase, according to TransUnion’s latest annual Securities and Exchanges filing. Commission.

In the lawsuit, the CFPB alleges that TransUnion, its subsidiary and its executive vice president deceived consumers by automatically signing them up for a monthly credit monitoring service when consumers thought they were only requesting a credit report. free and unique. Consumers were charged for the credit reporting service; the CFPB claims they were tricked into providing their payment information while providing credentials. The CFPB says only a statement in small, low-contrast print showed they were signing up for a monthly subscription. A required opt-in button was not present, says the CFPB.

In another example, the lawsuit refers to TransUnion’s website and its offering of a mortgage calculator. Consumers who clicked on a link that said they were “not sure” about their credit score would be directed to register for credit monitoring.

“TransUnion is an out-of-control repeat offender who believes it is above the law,” CFPB Director Rohit Chopra said in a statement about the lawsuit. “I’m concerned that TransUnion management is either unwilling or unable to operate its business legally.”

TransUnion released a public statement saying the claims were “without merit.” The credit reporting agency said she had complied with a 2017 consent order, even though the CFPB had not provided her with advice. The 2017 order referenced is where the CFPB settled charges with TransUnion and its subsidiaries for allegedly deceptive marketing of credit ratings and credit-related products, including credit monitoring services. The settlement agreed to the payment of restitution to those affected and an order that included the credit reporting giant that had to have consumers’ informed consent for recurring payments for subscription products or services, as well as provide a easy way for people to cancel subscriptions.

But TransUnion says the guidelines for the 2017 consent order were unclear. “Rather than provide supervisory advice on this issue and advise TransUnion of its concerns – as a responsible regulator would – the CFPB has remained silent and registered its requests for inclusion in legal action, including by naming a former executive in the complaint,” TransUnion’s statement read. . “The CFPB’s unrealistic and unworkable demands have left us with no alternative but to fully defend ourselves.”