The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against one of the three largest U.S. credit reporting agencies, TransUnion, for violating a 2017 order that is intended to protect consumers from deceptive marketing tied to their credit scores.
The agency claimed that even though TransUnion agreed to stop duping consumers four years ago, it disregarded the order’s stipulations and instead continued employing “deceitful digital dark patterns” in order to sweeten its revenue stream to the tune of $3 billion for 2021. Its complaint alleges that TransUnion also violated other consumer financial protection laws, such as the Fair Credit Reporting Act and the Electronic Fund Transfer Act.
“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB Director Rohit Chopra. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”
In response to the suit, TransUnion said it made efforts to appease the CFPB.
"Despite TransUnion’s months-long, good faith efforts to resolve this matter, CFPB’s current leadership refused to meet with us and were determined to litigate and seek headlines through press releases and tweets. The CFPB’s unrealistic and unworkable demands have left us with no alternative but to defend ourselves fully."
Failure to maintain consumer trust
Consumers typically feel that they can count on credit reporting agencies to create accurate credit reports to help banks, credit card companies, and other lenders ascertain how creditworthy they are and how much debt they can safely handle. However, the CFPB cites consumer reports in saying that TransUnion has struggled to maintain that trust. At least one ConsumerAffairs reviewer feels the same way.
“I got on the Transunion website to access my free credit report. But because of their deceptive website, I ended up signing up for a subscription that costs $25 a month without realizing it,” wrote Janissa from Wayan, Idaho.
“Nowhere on the page did it say anything about a charge. I thought I was just creating a free account in order to see my credit report. BEWARE when using Transunion!”
Trap doors and hidden tricks
What Janissa alluded to may be one of the “dark patterns” that the CFPB referred to. The agency said companies sometimes build in hidden tricks or trapdoors to get consumers to inadvertently click links, sign up for subscriptions, or purchase products or services. Worse yet, these dark patterns can complicate or hide information that makes it harder for consumers to do simple tasks like canceling a subscription service.
One example the agency gave relates to the free credit reports Americans are entitled to – in TransUnion’s case, annualcreditreport.com. Officials say TransUnion asked consumers to verify their identity by entering in information from a credit card on the site.
Where TransUnion crossed the line in the CFPB’s mind is that it then integrated deceptive buttons into the online interface that gave the consumer the impression that they could also access a free credit score on top of viewing their free credit report. But when reality kicked in, clicking that button actually signed consumers up for recurring monthly charges that used the credit card information they had provided.
Caught in TransUnion’s web?
The CFPB is seeking monetary relief for consumers, as well as compensation for unjust gains, injunctive relief, and civil money penalties. However, consumers need to know that the CFPB's action is not a final finding or ruling that the defendants have violated the law.
Individuals, including current or former employees, with information related to any misconduct by TransUnion can report it to the CFPB by e-mailing whistleblower@cfpb.gov or by calling the Whistleblower Tip Line at (855) 695-7974. You can learn more about being a whistleblower here.