The Consumer Financial Protection Bureau has ordered TransUnion and Equifax to pay more than $23.2 million in fines and restitution for deceiving customers about the usefulness of credit scores––and the cost of obtaining them.
The Bureau found that TransUnion and Equifax had lured consumers into enrolling in credit services advertised as free or costing only $1. In fact, these services would cost consumers more than $200 per year. (Talk about fleecing the consumer, am I right?)
The Bureau ordered TransUnion to reimburse $13.93 million to consumers and pay a $3 million civil fine. Equifax will reimburse $3.8 million and pay a $2.5 million civil fine for its deception.
Both credit reporting agencies will be required to modify their marketing practices. One of the changes which will go into effect: the companies must obtain customers’ consent to enroll them in services in which fees begin after free trials. They will also need to make it easier for consumers to cancel services they no longer want.
The Bureau said the misconduct at TransUnion dates back to July 2011; misconduct at Equifax took place between July 2011 and March 2014. Neither company admitted nor denied wrongdoing, but spokespersons for the respective companies said they believed their companies had complied with the law and would commit to better educating consumers about their credit.
In a statement, Richard Cordray, the director for the Consumer Financial Protection Bureau, said: “Credit scores are central to a consumer’s financial life, and people deserve honest and accurate information about them."