Equifax to pay fine, refunds for credit report sales


A federal agency ordered Atlanta-based Equifax and another credit reporting company, TransUnion, to pay more than $23 million in fines and restitution for allegedly misleading customers about credit score services they have marketed.

The two companies, which are among the nation’s Big Three credit agencies, misled consumers on the cost and value of credit score services sold from 2011 to 2014, according to the Consumer Financial Protection Bureau.

The companies didn’t admit or deny the CFPB’s allegations in consent orders with the agency.

“The CFPB’s investigation into these matters has been ongoing for nearly three years, and Equifax implemented changes addressing the CFPB’s concerns shortly after the investigation began,” the company said in a statement.

“While Equifax does not believe it has violated any laws and has not admitted any liability, Equifax determined it was in its best interest to resolve the matter with the CFPB,” the company said.

The federal agency said the companies misleadingly marketed their scores as the same ones used by banks and other lenders to make credit decisions. The CFPB said most lenders use so-called “FICO” scores offered by another companiy, Fair Isaac Corp., while the credit reporting companies’ own methodology may produce different scores.

It wasn’t immediately clear how many people were affected. The consent orders direct the companies to determine the customer pool.

It could be a large number, given the number of incidents where hackers stole personal information on millions of consumers at large retailers in recent years, prompting people to check their credit reports.

The CFPB said the two firms also deceived customers into signing up for subscriptions, typically for $16 a month, for their credit scores and other information that often can be obtained for free.

Under federal law, consumers can obtain one free credit report annually from each credit reporting firm, or up to three a year from the three major firms.

“TransUnion and Equifax deceived consumers about the usefulness of the credit scores they marketed, and lured consumers into expensive recurring payments with false promises,” said CFPB Director Richard Cordray. “Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them.”

The CFPB said the two firms’ actions violated the federal Fair Credit Reporting Act.

Equifax agreed to pay a $2.5 million civil fine and to provide $3.8 million in restitution to customers. TransUnion, based in Chicago, agreed to pay a $3 million fine and to provide more than $13.9 million in restitution.

The companies also agreed to provide clearer information on the cost and usefulness of their services, and to get customers’ express consent before signing them up for monthly subscriptions.



Reader Comments ...


Next Up in Business

SunTrust aims to spread name with airport branch, ATMs
SunTrust aims to spread name with airport branch, ATMs

By opening a branch and ATMs at the world’s busiest airport, SunTrust hopes to gain national visibility. The Atlanta-based bank has a new contract to operate a branch and 16 ATMs at Hartsfield-Jackson International in the first quarter of 2019, replacing Wells Fargo ATMs. And with the Super Bowl headed for Atlanta next February, SunTrust plans...
Atlanta-based Interface in $420 million purchase of German company
Atlanta-based Interface in $420 million purchase of German company

Atlanta-based Interface has made a $420 million deal to buy a German company that is a leader in the global flooring market. Interface is acquiring Nora Systems, a move that the company said should dramatically expand its market reach to new categories. The two companies are more “complementary” than competitive, said Jay...
Home sales sag, but prices up 9.9 percent from last year
Home sales sag, but prices up 9.9 percent from last year

Metro Atlanta home prices are up 9.9 percent from a year ago, even as the number of sales has slipped. The strong rise in prices is a sign of the continued imbalance in housing, with demand continuing to out-pace supply. The median price of a home sold in May was $248,445, compared to $226,000 during the same month a year ago, according to a report...
Tapped-out demand for beer partly blamed for layoffs
Tapped-out demand for beer partly blamed for layoffs

A global manufacturer of glass has confirmed plans to close its Atlanta facility next month, laying off about 270 people, most of them hourly workers. Owens-Illinois, Inc., which is based in Ohio, will shutter the Sylvan Road facility around July 18, according to a spokeswoman at the $6.9 billion-a-year company. The decision to close the Atlanta plant...
Talk rising of possible recession, trade key danger for Atlanta
Talk rising of possible recession, trade key danger for Atlanta

Tom Smith watches each Sunday morning for signs of recession at Panera Bread. It’s telling: The size of the crowd, the attitude of the families – are they enjoying the chance to relax and spend a little money on themselves, the way people do when they have a few dollars extra, or are they anxious about keeping their jobs and paying their...
More Stories