2022Credit Reports

Written By ESR News Blog Editor Thomas Ahearn

On April 12, 2022, the Consumer Financial Protection Bureau (CFPB) – a U.S. government agency that implements and enforces federal consumer financial law – filed a lawsuit against a credit reporting agency for violating a 2017 law enforcement order “that was issued to stop the company from engaging in deceptive marketing regarding its credit scores and other credit-related products,” according to a CFPB news release.

In January 2017, the CFPB settled charges with the credit reporting agency, which agreed to pay $13.9 million in restitution to victims and $3 million in civil penalties. The company and its subsidiaries also agreed to a formal law enforcement order that, among other things, required the company to warn consumers that lenders are not likely to use the scores they were supplying and provide an easy way for people to cancel subscriptions. 

After the order went into effect, the credit reporting agency continued its unlawful behavior, disregarded the order’s requirements, and continued employing deceitful digital dark patterns to profit from customers. The CFPB’s complaint also alleges that the credit reporting agency violated additional consumer financial protection laws. Specifically, since repeat offender law enforcement is a top priority for the CFPB, the lawsuit alleges that:

  • The credit reporting agency flouted a formal law enforcement order and continued to engage in deceptive conduct in its marketing and sale of credit-related products, failed to provide required disclosures to make its marketing not misleading, and failed to assemble and review consumer information and implement appropriate improvements to advertisements. 
  • The credit reporting agency deceived customers through “digital dark patterns” that are hidden tricks or trapdoors companies build into their websites to get consumers to inadvertently click links, sign up for subscriptions, or purchase products or services.
  • The credit reporting agency cheated customers through the marketing and sale of its credit-related products by misrepresenting numerous aspects of its products, services, and subscription plans, including that its credit monitoring service was a standalone credit score or credit report.

The CFPB’s lawsuit alleges that the credit reporting agency violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by failing to implement the requirements of the CFPB’s 2017 order and by engaging in deceptive acts and practices. The CFPB also alleges that the credit reporting agency violated Regulation V, which implements the Fair Credit Reporting Act (FCRA) and the Electronic Fund Transfer Act.

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions violating consumer financial laws, including engaging in deceptive acts or practices or violating the Electronic Fund Transfer Act, which establishes a basic framework of the rights, liabilities, and responsibilities as to electronic fund transfers. The CFPB news release is available here

Employment Screening Resources (ESR) – a service offering of ClearStar, a leading provider of Human Capital Integrity℠ technology-based services specializing in background checks and medical screening – offers comprehensive background screening solutions that empower employers in all industries to make compliant and informed hiring decisions. To learn more about ESR, contact us today.

NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – reminds readers that allegations made in class action lawsuits are not proof a business or individual violated any law, rule, or regulation since they are in the pleading stage with no factual adjudications yet.

NOTE: Employment Screening Resources (ESR) – a service offering of ClearStar – does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

© 2022 Employment Screening Resources (ESR) – A Service Offering of ClearStar – Making copies of or using any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.

Share on Social Media