TransUnion Faces Allegations of Violations of Fair Credit Reporting Act

The Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) have taken enforcement actions against consumer reporting company TransUnion, alleging multiple violations of the Fair Credit Reporting Act.

The actions focus on TransUnion’s rental screening subsidiary, TransUnion Rental Screening Solutions, which the regulators said failed to ensure the accuracy of rental background checks used by landlords to make housing decisions and withheld the names of third parties providing inaccurate information from renters, the CFPB said in a Thursday (Oct. 12) press release. As a result of these violations, the CFPB and FTC have requested a federal court to order TransUnion to pay $15 million and make significant improvements to its reporting of evictions.

In a separate action, the CFPB is also ordering TransUnion to pay $8 million for deceiving consumers about timely placing or removing security freezes and locks on their credit reports, according to the release. The regulator said that the company told consumers that these requests were completed, the requests were dumped into a years-long backlog. The company also failed to exclude certain populations, including active-duty military members, from pre-screened solicitation lists, the CFPB said.

In a statement provided to PYMNTS, TransUnion said that it did not admit any wrongdoing with either settlement and that it agreed to these settlements to resolve these matters and proceed with its work.

Regarding TransUnion’s Rental Screening Solutions reporting, the company said that its services provide valuable insights and data and that it has worked with the CFPB and FTC to enhance its rental screening reporting practices.

“This settlement reflects the agencies’ evolving regulatory objectives and our openness to join them in reasonable initiatives that are beneficial to consumers and support safe, affordable housing,” TransUnion said in the statement.

Regarding the settlement around the placement and lifting of security freezes and locks, the company said it corrected the associated system issues in 2020 and has processes in place to monitor and address any further issues.

“TransUnion is committed to helping consumers manage their credit information, and we enacted enhancements to ensure timely placement and removal of security freezes and locks,” TransUnion said in the statement.

CFPB Director Rohit Chopra said in the regulators’ press release that TransUnion’s failure to follow the law put Americans at risk of wrongful housing denials. Samuel Levine, Director of the FTC’s Bureau of Consumer Protection, added that the order will protect consumers in their search for housing.

If approved by the court, the proposed order on rental background checks would require TransUnion to pay $11 million to consumers, cease illegal tenant screening practices, and implement procedures to improve accuracy and disclosure. The company would also be subject to a $4 million penalty.

Regarding the enforcement action related to security freezes, the CFPB’s order requires TransUnion to pay $3 million to consumers, address technology problems, and pay a $5 million penalty.