TransUnion and Equifax Inc., two credit reporting companies, were fined by the United States CFPB on the claims that they deceived their customers.
TransUnion is an American company based in Chicago, Illinois. It is considered to be amongst the top five credit bureaus in the United States. The company offers information management services and credit information.
Its services can be accessed in 33 countries at a worldwide level. TransUnion has an estimated number of 500 million consumers and serves about 45,000 businesses.
Equifax is also considered to be amongst the top five consumer credit reporting agencies in the U.S. It was founded in 1899, and as such, it is also the oldest service.
It is headquartered in Atlanta, Georgia, but has a global outreach. Equifax has offices in 14 countries and serves more than 800 million customers. The agency reportedly gathers and maintains data for over 88 million global businesses.
The United States CFPB released a statement in regards to the two agencies. CFPB is the Consumer Financial Protection Bureau. On Tuesday, it announced that it will be fining TransUnion and Equifax.
CFPB authorities went to offer details in regards to the decision. Measures will be taken against TransUnion and Equifax for reportedly deceiving their clients.
The two are said to have used deceitful marketing tactics. More exactly, they are said to have boasted the actual cost and usefulness of their sold credits. They are also said to have lured customers into making recurrent and costly payments.
As such, the U.S. regulator has advanced a combined $17.6 million value. The sum must be paid in the form of customer restitutions. A $5.5 million worth of fines would also have to be paid to the CFPB.
TransUnion will have to reportedly provide over $13.9 million in restitutions. These will target its potentially affected customers. A further $3 million will have to be paid in the form of a civil fine.
Equifax will have to pay a civil fine coming up to $2.5 million. Its restitutions value will have to come up to $3.8 million in reimbursements.
A combined fine and restitutions sum will come to an over $23 million value for both TransUnion and Equifax.
The CFPB TransUnion and Equifax fine target an earlier practice. More exactly, Equifax will get fined for its July 2011 to March 2014 marketing. TransUnion will get fined for the period starting with July 2011.
According to the CFPB, the two reportedly violated the Dodd-Frank financial reform law.
The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed back in 2010. It means to ensure and promote the Unites States’ financial stability.
It would try to so by improving transparency and accountability. Amongst others, it should help protect customers from potentially abusive financial practices and services.
The CFPB also requested TransUnion and Equifax to change their marketing practices. It asked them to turn to truthfully representing their credit scores actual value. Both of the score that they provide and of the ones they might obtain.
As such, the two will have to offer clear information about the scores they are selling. They will also have to inform and obtain customer consent before any credit-related product enrollment. The consent will have to be obtained for potential negative option feature products.
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