Two of the top credit reporting companies agree to pay $23M to resolve deceptive marking claims
Credit reporting companies Equifax and TransUnion have agreed to pay more than $23 million to resolve claims that they misled consumers and lured them into paying monthly fees for credit-related products.
The Consumer Financial Protection Bureau announced consent orders against the companies on Tuesday, report the Chicago Tribune and the Wall Street Journal (sub. req.). They are two of the nation’s largest three credit-reporting companies.
According to the CFPB, the companies falsely portrayed the credit scores they marketed to consumers as the same scores typically used by lenders for credit decisions. In reality, lenders use a variety of credit scores, which can vary by provider and target industry, according to the consent decrees (here and here).
The companies also touted free or $1 credit scores, according to the CFPB. In reality the companies gave consumers a free trial and automatically enrolled those who signed up in a subscription program unless the consumers cancelled. The monthly fee was usually $16 or more.
The companies did not admit wrongdoing, though they say they have already changed many of the activities targeted by the CFPB.
TransUnion will pay more than $13.9 million in restitution to affected consumers, and will pay a $3 million civil penalty. Equifax will pay almost $3.8 million in restitution and will pay a $2.5 million civil penalty.
