CFPB Sues TransUnion, Former Exec, for Violating Consent Order

If you drew a Venn diagram of two circles, and used recent comments and announcements from the Consumer Financial Protection Bureau to fill them in, you would have one circle that was labeled “credit reporting agencies” and one circle that was labeled “repeat offenders.” Those are the two targets that the Bureau has put in its crosshairs. In the intersection of those two circles, I give you a lawsuit filed by the CFPB yesterday against TransUnion — a credit reporting agency — and one of its former executives, who are accused of violating a previous enforcement order to refrain from engaging in deceptive marketing regarding the credit-related products it sells.

Maybe the news should not have come as a surprise to anyone.

Back in 2017, TransUnion agreed to pay nearly $17 million in fines and restitution to settle an enforcement action with the CFPB, while also agreeing to warning consumers that lenders were not likely to use the scores that the company was supplying and obtain the express consent of consumers for recurring payments and services, while also providing an easy way for consumers to cancel those subscriptions.

Twice since that settlement was executed, the CFPB says it has told TransUnion that it was violating the terms of that order. As well, consumers filed more than 150,000 complaints with the CFPB about TransUnion last year alone. So yesterday, the Bureau filed another lawsuit, accusing the company and the former head of the unit that sold products and services directly to consumers of having “flouted” that previous order, and using deceptive tactics to deceive consumers into signing up for products and services and then “cheated” consumers by misrepresenting that its credit monitoring service was a standalone product. A copy of the complaint can be accessed by clicking here.

[EDITOR’S NOTE: Does the threat of individual liability scare you? It should. Click here to sign up for a webinar on Monday, April 18 featuring Joann Needleman and Manny Newburger on what you need to know about individual liability.]

“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB Director Rohit Chopra, in a statement. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”

In a statement of its own, TransUnion said the CFPB was not acting “like a responsible regulator” should and that the Bureau was “determined to litigate and seek headlines through press releases and tweets.”

“We have been in compliance with our obligations and we remain in compliance with the consent order today,” the company said.

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