TransUnion has repeatedly used misleading sales practices, says regulator

The Consumer Financial Protection Bureau prosecuted the credit reporting company TransUnion and a former senior director – John Danaher, who heads the company’s consumer sales unit – for violating a 2017 mandate to stop using deceptive tactics to attract customers in recurring subscription payments.

“TransUnion is a repeat offender who is out of control who thinks it’s above the law,” said Rohit Chopra, the agency’s director.

Following the 2017 order, TransUnion used hard to spot fine print on its website and registration forms to lure customers into recurring costs for their products, the agency said. For example, TransUnion ran ads on – the official site where consumers can get one free credit report a year from any of the three major agencies – which, when clicked, redirects people to a paid credit monitoring application form, according to the bureau.

Hundreds of people ended up saying they had tried to get their free annual report and instead signed up for a paid monthly subscription, the agency said in a lawsuit filed Tuesday in federal court in Chicago, where TransUnion is based.

TransUnion said in a written statement that the agency’s claims against both it and Mr. Danaher “are deserving and in no way reflect the consumer-first approach we are taking to managing all of our businesses.” Mr. Danaher, who recently left TransUnion, did not immediately respond to questions about the consumer agency’s question.

Mr. Chopra, who has called for tougher penalties for companies that have repeatedly violated consumer protection laws, said the agency had taken the rare step of personally prosecuting an company official because Mr. Danaher’s actions were “egregious.”

Mr. Danaher “knew that following the law would reduce business income” and “made a plan to escape it and work around it,” said Mr. sei Chopra.

The agency is asking the court for financial reimbursement for consumers of the suspects, other fines and an order blocking the company from federal consumer protection laws.

TransUnion is one of the three major credit bureaus, along with Equifax and Experian. They earn most of their money by selling credit reports to buyers and lenders, but also sell credit monitoring products directly to consumers. On its website, TransUnion advertises that it “has 200 million files that profile almost every credit-active consumer in the United States.”

In the 2017 case, TransUnion paid nearly $ 14 million to consumers and a $ 3 million civil fine to resolve claims that it had drawn consumers into recurring payments and made false statements about the credit scores it sold to consumers. Without giving in to past crimes, TransUnion also entered with five years of increased oversight by the agency to confirm its compliance with federal consumer laws.

The Consumer Agency said in its latest lawsuit that it had told TransUnion multiple times, starting in 2019 and continuing through 2021, that the company had violated the 2017 order. But the company did not change its behavior, Mr. Chopra said at a press conference.

“The leadership of TransUnion is unwilling or unable to legally operate their businesses,” he said. sei Chopra.

The bureau said in its complaint that Mr. Danaher, which for many years led TransUnion Interactive, the company’s consumer sales subsidiary, took a number of steps to increase the order. This included stopping the exit of a confirmed “opt-in” checkbox intended to stop unintentional subscriptions to subscriptions.

“I make the decision not to accuse individuals lightly, but based on the evidence discovered in the investigation, I believe it was appropriate,” said Mr. sei Chopra. He added that if the bureau’s investigation revealed other evidence of crimes by senior leaders, the bureau would change its complaint to charge them personally as well.

TransUnion said in its prepared statement that it had tried to abide by the terms of the agreement, but was met with silence when seeking guidance from the agency.

“Despite TransUnion’s months-long, well-trusted efforts to resolve this issue, the current leadership of the CFPB refused to meet with us,” the company said. It added that the “unrealistic and unworkable demands of the bureau left us with no alternative but to defend ourselves completely.”

Mr. Chopra, who worked on setting up the consumer bureau in 2010 and 2011 and rejoined the bureau last year as its director, is known as an aggressive supervisor and has openly spoken out about his frustration with how some companies continue to obey the law. break again. He wants regulators to go further than imposing fines and penalties – such as revoking licenses or growth caps – which really hurts, he said.

“We need to force repeat lawbreakers to change business behavior and make companies realize that it is cheaper, and better for their bottom line, to follow the law than to break it,” he said. Chopra said in a speech last month.

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