CFPB

Conduent, Formerly Xerox Business Services, Fined By The CFPB

CFPB

The Consumer Finance Protection Bureau has announced a fine against Xerox Business Services, currently known as Conduent Business Services.  The $1.1 million fine was assessed for software efforts that led to incorrect and damaging consumer information being fed to the credit reporting agencies for over one million people.

The fine was drawn not only for the errors, but for the fact that on investigation, the CFPB found that Xerox/Conduent knew there were problems with the software but failed to notify all of its auto lender clients about those problems.

“Xerox Business Services provided flawed software that resulted in incorrect or incomplete credit reporting information on more than a million borrowers,” said CFPB Director Richard Cordray. “The company compounded the problem by keeping lenders in the dark about the defects. Mistakes on a credit report can greatly harm consumers, so we are ordering Xerox to fix its flawed systems.”

The issue seems to have originated in an automation function that was responsible for transmitting information about borrowers’ auto loans to credit reporting agencies.  Defects in the software caused inaccurate consumer information about auto loan performance to be reported to the credit report bureaus — leading to about a million mistakes.

Xerox compounded the issue with its software by failing to disclose the issue to its client lenders after they knew the issue was serious and widespread.  Xerox also failed to pass along information it learned from the software’s developer about upgrades needed to prevent mistakes. As a result, for years Xerox’s clients persisted in transmitting inaccurate and incomplete information about borrowers and their accounts to the credit reporting agencies.

Other than the fine, the CFPB has ordered Conduent Business Services to explain the errors it made to its clients — as well as to explain the correct use of their software to their clients going forward.

——————————–

Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The September 2019 AML/KYC Tracker Report provides an in-depth examination of current efforts to stop money laundering, fight fraud and improve customer identity authentication in the financial services space.

TRENDING RIGHT NOW

To Top