• Fri. Dec 9th, 2022


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CFPB chief Chopra says TransUnion is ‘out of control’ as regulator sues credit reporting company for deceptive practices – MarketWatch

The nation’s top consumer regulator announced Tuesday that is filing a lawsuit against consumer credit reporting company TransUnion and a former top executives for violating a 2017 law enforcement order that blocked the company from engaging in deceptive marketing practices,

“TransUnion’s conduct made it crystal clear that the company is an out-of-control repeat offender that must be held accountable,” Consumer Financial Protection Bureau Director Rohit Chopra told reporters at a virtual press conference. “TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”

The case centers around allegations that the company deceptively marketed its credit report and credit-monitoring services to U.S. consumers by using “digital dark patterns” to trick them into buying subscriptions and making it difficult to cancel those subscriptions.

The CFPB said that TransUnion asked customers, who were seeking a free annual credit report the company is required to provide under federal law, to enter credit card information as part of what appeared to be an identity-verification process.

The agency said the company then “integrated deceptive buttons” into its website that made customers think they could access their credit score for free, in addition to the free report.

“In reality, clicking this button signed customers up for recurring monthly charges using the credit card information they had provided,” the CFPB said in a press release. “For consumers looking for a way out of their subscriptions, TransUnion not only failed to offer a simple mechanism for cancellation, it actively made it arduous for consumers to cancel through clever uses of font and color on its website.”

The problem of companies using “dark patterns” to trick consumers into buying subscriptions or other products and services they don’t want is “something that’s a broader problem throughout the marketplace,” a senior CFPB official told reporters. “And certainly if we find other actors engaging in similar conduct…we will bring enforcement actions.”

In addition to suing the company, the CFPB’s lawsuit is aimed against executive John Danaher, who has led the consumer facing side of TransUnion’s business since 2004, though the CFPB said that Danaher has recently “separated” from TransUnion.

“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 statement in response to the lawsuit.

“Rather than providing any supervisory guidance on this matter and advising TransUnion of its concerns — like a responsible regulator would — the CFPB stayed silent and saved their claims for inclusion in a lawsuit,” the statement continued. “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.”

Shares of TransUnion TRU, -1.52% were trading lower Tuesday, amid a broad rally for U.S. stocks SPX, -0.66%.