Contact Your Financial Adviser Money Making MC
5
January 2017
 |
credit score (The Total Investment & Insurance
Solutions)
Two of the
largest credit score reporting agencies in the US have to pay millions in fines
for deceiving consumers about the actual cost and usefulness of credit scores
they sold to consumers under agreements with the Consumer Financial Protection
Bureau (CFPB). The Total
Investment & Insurance Solutions
TransUnion and Equifax falsely
advertised that the credit scores they marketed to the public were the same
scores lenders used to make credit decisions when they weren’t, in violation of
the Dodd-Frank Wall Street reform law. The credit reporting companies also ran
afoul of the law by deceptively advertising that their credit-related products
were free, or only “$1,” when in reality the companies enrolled a customers in
negative-option offers in which they were charged $16 or more per month if they
failed to cancel the subscription service during the trial period, a detail not
adequately disclosed.
Equifax also
violated the Fair Credit Reporting Act, which allows consumers to receive a
free credit report once a year, when it required them to view the company’s
advertisements instead of just allowing them to access their free reports. The Total Investment & Insurance
Solutions
TransUnion
and Equifax are two of the nation’s three largest credit reporting agencies.
They collect credit information on consumers, including their amount of debt,
payment histories, credit limits and list of current creditors, which they
provide to businesses. The companies also sell credit-related products directly
to consumers such as credit scores, reports, and credit-monitoring services.
Under the
consent orders, the companies have to pay $17.6 million combined in consumer
restitution. They also have to:
·
Clearly inform consumers about the nature of the scores
they are selling them and the true usefulness of the reports.
·
Obtain express informed consent before enrolling
consumers in any recurring monthly subscription services.
·
Provide an easy way for consumers to cancel any purchase
of credit-related products and stop billing and collecting payments for any
recurring charges when a consumer cancels.
·
Pay an additional $5.5 million in penalties.
This is not
the first time credit reporting agencies have been cited by government
regulators. In a 2000 agreement with
the FTC, Equifax, TransUnion and Experian agreed to pay $2.5 million to settle
charges that the companies violated the Fair Credit Reporting Act by blocking
millions of calls from consumers who wanted to discuss their credit reports and
also kept consumers on hold for unreasonable amounts of time. In a separate FTC action in 2005,
Consumerinfo.com, doing business as Experian Consumer Direct, settled charges
with the agency that it deceptively marketed “free credit reports” by not
adequately disclosing that consumers would be automatically charged $79.95 and
also be signed up for a credit monitoring service if they didn’t cancel within
30 days.The Total Investment &
Insurance Solutions
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