Credit Bureaus Get Fined for Shady Practices

The New Year found the U.S. Consumer Financial Protection Bureau (CFPB) ordering two credit reporting agencies to pay more than $23.2 million in fines and restitution for deceiving consumers about their credit scores.

TransUnion and Equifax were fined due to their business practices, where they lured consumers into enrolling in their credit monitoring services, in most cases advertised as ‘free’ or costing only $1, but ended up costing as much as $200.

In addition to the fines, both companies have been ordered to change their marketing practices by making it clear what the fees are and when they will be charged.

In addition to the issues over the shady marketing practices, both credit entities were chastised for falsely representing that the credit scores they provided to consumers for a fee where the same scores provided to lenders determining credit worthiness.

“Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them,” CFPB Director Richard Cordray said in a statement.

TransUnion will reimburse $13.93 million to consumers and pay a $3 million civil fine, while Equifax will reimburse $3.8 million and pay a $2.5 million civil fine, the CFPB said.

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