RSSThe Consumer Financial Protection Bureau is filing a lawsuit against TransUnion, two of its subsidiaries, and recently departed executive John Danaher for violating a 2017 bureau order over deceptive marketing regarding its credit scores and other credit-related products.
Chicago-based TransUnion continued its deceptive marketing, the CFPB said, and disregarded the order’s requirements. The complaint also alleges that TransUnion violated additional consumer financial protection laws.
The 2017 settlement charged TransUnion and its subsidiaries with deceptively marketing credit scores and credit-related products, including credit monitoring services. As part of that settlement, TransUnion agreed to pay $13.9 million in restitution to victims and $3 million in civil penalties.
TransUnion and its subsidiaries also agreed to a formal law enforcement order that, among other things, required the credit reporting giant to warn consumers that lenders are not likely to use the scores they are supplying, obtain the express informed consent of customers for recurring payments for subscription products or services, and provide an easy way for people to cancel subscriptions.
Instead, the company continued using misleading marketing as well as other tactics “to trick people into recurring payments and to make it difficult to cancel them,” according to the complaint. Danaher, who recently left the company, was a top executive in the TransUnion unit that sold products and services directly to consumers, and was responsible for decisions to ignore or delay implementation of the 2017 order.
In October 2018, the CFPB began an examination of TransUnion. In May 2019, CFPB examiners informed TransUnion that it was violating multiple requirements of the order, but the company didn’t alter its behavior, even when given another warning in June 2020, the CFPB said.
“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB Director Rohit Chopra. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”
Consumers filed almost 150,000 complaints against TransUnion with the CFPB last year, and the three major credit agencies — Equifax (also named in the 2017 order), Experian and TransUnion — made up more than half of complaints submitted from January 2020 to September 2021.
TransUnion collects information on 200 million individuals, the CFPB said. Besides its credit reporting agency, it also markets, sells, and provides credit-related products — such as credit scores, credit reports, and credit monitoring — through a subsidiary, TransUnion Interactive.
