Credit bureau TransUnion used deceptive marketing, government lawsuit says: NPR
The federal regulator that oversees consumer credit is suing TransUnion, one of the major credit reporting agencies in the United States, for deceptive marketing practices and the use of “dark patterns” on its website to induce consumers to sign up for a recurring fee.
The Consumer Financial Protection Bureau (CFPB) filed the lawsuit in federal court on Tuesday, accusing the company, two of its subsidiaries and former executive John T. Danaher of violating a 2017 settlement agreement over claims similar.
“TransUnion is an out-of-control repeat offender who believes itself above the law,” said CFPB Director Rohit Chopra. said in a press release. “I’m concerned that TransUnion’s management is either unwilling or unable to operate its business legally.”
As part of the 2017 deceptive marketing practices settlement, TransUnion agreed to pay $13.9 million in restitution to victims and an additional $3 million in civil penalties, the CFPB said.
The company also agreed, in a binding law enforcement order, to take other steps regarding how it interacts with customers, such as obtaining informed consent for certain recurring payments and providing users with an easy way to cancel subscription services.
The CFPB now claims that TransUnion violated the principles of that agreement.
The government accuses TransUnion of giving consumers the false idea that they were already signed up for the company’s credit monitoring services and of misrepresenting how other companies would use credit scores compiled by TransUnion, among other allegations.
To entice customers to spend more money on TransUnion’s services, TransUnion also used deceptive digital tricks known as “dark patterns,” such as putting information in low-contrast fine print or including a disclosure in a image that took longer to load than the rest of the webpage, the lawsuit claims.
The CFPB alleges that Danaher, who was a senior executive at the TransUnion subsidiary that sold products and services directly to consumers, failed to comply with the 2017 order.
In a statementTransUnion calls the lawsuit “without merit” and says the claims do not reflect the company’s “consumer-centric approach”.
The Chicago-based company says it submitted a plan to the CFPB outlining how it would comply with the 2017 settlement, but says it never heard from the office.
“We have complied with our obligations and remain in compliance with the consent order today,” TransUnion’s statement said.
“Rather than provide supervisory advice on this matter and inform TransUnion of its concerns – as a responsible regulator would – the CFPB has remained silent and registered its requests for inclusion in a lawsuit, including appointing a former executive in the complaint,” the statement continued. .
But consumer advocates applauded the CFPB for filing the complaint and say such behavior is “typical” of credit reporting agencies.
“Federal regulators, state attorneys general, consumer rights advocates and private attorneys have been fighting a culture of impunity and arrogance at the hands of credit bureaus for decades,” said Chi Chi Wu, attorney at the National Consumer Law Center, in a statement. “Unfortunately, it is the American consumer who ultimately pays the price for the credit bureaus’ longstanding habit of flouting the law.”