In the latest enforcement action under Director Rohit Chopra’s leadership, the bureau alleges TransUnion and a former executive violated the conditions of a 2017 enforcement order. TransUnion’s response outlines compliance with the order.
04/12/2022 4:15 P.M.
3 minute read
The Consumer Financial Protection Bureau has filed a lawsuit against TransUnion, two of its subsidiaries and longtime executive John Danaher for violating a 2017 enforcement order.
Danaher worked as TransUnion’s president of Consumer Interactive, described as the company’s consumer subsidiary, from 2004-2021, according to Danaher’s LinkedIn page.
“The  order was issued to stop the company from engaging in deceptive marketing, regarding its credit scores and other credit-related products,” according to a news release from the CFPB.
The CFPB alleges TransUnion violated additional consumer financial protection laws and disregarded a previous order.
The 2017 order resulted from a settlement between the CFPB, TransUnion and its subsidiaries “for deceptively marketing credit scores and credit-related products, including credit monitoring services.”
Requirements of the settlement, according to the CFPB, include:
- “TransUnion agreed to pay $13.9 million in restitution to victims and $3 million in civil penalties.”
- “TransUnion and its subsidiaries also agreed to a formal law enforcement order that, among other things, required the credit reporting giant to warn consumers that lenders are not likely to use the scores they are supplying, obtain the express informed consent of customers for recurring payments for subscription products or services, and provide an easy way for people to cancel subscriptions.”
- “The order was binding on the company, its board of directors, and its executive officers.”
Renewed Enforcement Action
The CFPB’s lawsuit in the U.S. District Court for the Northern District of Illinois, Eastern Division alleges that:
- TransUnion and Danaher “continued to engage in deceptive conduct in its marketing and sale of credit-related products, it failed to provide required disclosures to make its marketing not misleading, and it failed to assemble and review consumer information and implement appropriate improvements to advertisements. Danaher’s actions also make him liable under the law.”
- “For its subscription products, TransUnion relied on digital dark patterns from beginning to end of the TransUnion customer experience.”
- “TransUnion misrepresented 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 in the lawsuit also “alleges that TransUnion violated the Consumer Financial Protection Act of 2010 by failing to implement requirements of the bureau’s 2017 order and by engaging in deceptive acts and practices. The CFPB also alleges that TransUnion violated Regulation V, which implements the Fair Credit Reporting Act, and the Electronic Fund Transfer Act,” according to the news release. “The CFPB is seeking monetary relief for consumers, such as restitution or return of funds, disgorgement or compensation for unjust gains, injunctive relief, and civil money penalties. The complaint is not a final finding or ruling that the defendants have violated the law.”
“The claims made by the CFPB against TransUnion and John Danaher, a former executive, are meritless and in no way reflect the consumer-first approach we take to managing all our businesses,” TransUnion said in a response to the CFPB’s complaint. “In January 2017, TransUnion entered into a consent order with the CFPB relating to how it markets TransUnion Credit Monitoring, a subscription product that offers consumers credit monitoring and identity theft protection services, as well as access to their credit scores. Shortly thereafter, as required by the consent order, TransUnion submitted to the CFPB for approval a plan detailing how it would comply with the order. The CFPB ignored the compliance plan, despite being obligated to respond and trigger deadlines for implementation. In the absence of any sort of guidance from the CFPB, TransUnion took affirmative actions to implement the consent order.”
TransUnion said in the response that it has been in compliance with its obligations and remains in compliance with the CFPB’s consent order.
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