The Consumer Financial Protection Bureau said Tuesday (Jan. 3) that it has fined TransUnion and Equifax amid allegations that the two companies misled consumers about “the usefulness and actual cost” of the credit scores that had been sold, according to a release by the bureau.
The CFPB also said that the two firms had set up recurring payments for credit products. As a result, TransUnion and Equifax have been ordered to pay $5.5 million in fines to the CFPB, with another $17.6 million to go toward restitution to consumers. In addition, according to the release, TransUnion and Equifax must represent costs and benefits tied to the scores in a truthful manner. Both firms had been marketing the scores provided to consumers as being the ones that lenders use in their credit decision processes. The scores were not, in fact, typically used to make credit decisions. And as for the free or low-cost programs advertised, consumers were automatically enrolled in recurring payment programs. The CFPB also said that Equifax violated the Fair Credit Reporting Act, where, until the beginning of 2014, consumers opting to receive a free credit report had to first view advertisements.
