The lawsuit, filed in federal court in Illinois, began six years ago with an administrative lawsuit against TransUnion accusing it of various deceptive practices that harm consumers. The enforcement action led to a settlement in 2017 that included a consent order, which the CFPB now calls an “enforcement order.” Under the order, TransUnion agreed to clean up its act and end marketing practices that the CFPB said were misleading.
However, the lawsuit alleges that TransUnion ignored the 2017 order and continued its deceptive practices. CFPB director Rohit Chopra said in a trial press release that “TransUnion is an out-of-control repeat offender who believes it is above the law.” The press release also said “enforcement of repeat offenders is a top priority” for the agency, noting that it received nearly 150,000 complaints about TransUnion last year.
The crux of the dispute centers on what the CFPB says is TransUnion’s use of “dark patterns,” which the agency says “are hidden tricks or trapdoors that companies embed into their websites to lead consumers to inadvertently click on links, subscribe or purchase products. or services. »
The CFPB alleges that TransUnion would encourage people requesting a free credit report to annualcreditreport.com think they could also get a free report on their credit score. Instead, these people were lured – through the use of dark schemes – into buying a monthly subscription to a credit monitoring service, billed to a credit card account. TransUnion also made it difficult to cancel this service.
The agency also said in its complaint that TransUnion, despite the 2017 order specifically banning the practice, continues to misrepresent the credit scores it creates and tries to sell to consumers as the same scores creditors use to take. credit decisions. However, the CFPB stated that very few creditors use TransUnion credit scores as part of their credit decision-making practices and that TransUnion’s internally derived credit scores may differ significantly from credit scores. actually used by creditors.
The CFPB complaint alleges that TransUnion’s failure to comply with the 2017 order was a conscious and intentional act intended to avoid reducing the credit monitoring revenue that its dark patterns strategy was generating. The CFPB expects the companies it regulates to seek forgiveness and cooperate in resolving issues that the agency believes violate national consumer protection laws. The CFPB wants the court to order TransUnion to abide by the prior settlement, pay refunds, return profits from such behavior, pay a fine, and pay the CFPB’s legal fees.
In an interesting twist, the CFPB press release encourages current and former TransUnion employees to become whistleblowers and report what they know to [email protected] or by calling a whistleblower line at (855) 695- 7974. The release points potential whistleblowers to part of the CFPB website where they can learn more about the benefits of becoming a whistleblower.
Jim Flynn works for the firm Flynn & Wright of Colorado Springs; [email protected]