CFPB Sues TransUnion Over Credit Report Monitoring

A picture of a tablet on a resting on wooden background, showing a stock credit score report.

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The Consumer Financial Protection Bureau announced it has sued TransUnion and its subsidiaries, alleging deceptive marketing to consumers seeking a free credit report.

The CFPB accuses TransUnion of “deceitful digital dark patterns” to profit from consumers who were seeking a free credit report and then got them to sign up for costly credit monitoring. Dark patterns are hidden tricks or trapdoors that companies can build into websites to get consumers to click links, sign up for subscriptions, or purchase products, the CFPB says.

TransUnion is a parent company of one of the nation’s three largest credit reporting agencies. It collects consumer credit information on 200 million individuals, including borrowers’ payment histories, debt loads, maximum credit limits, and more. Beyond giving consumers access to their credit reports, it also markets, sells, and provides credit-related products through its subsidiaries.

TransUnion’s credit monitoring division reportedly brought in $546 million in gross revenue in 2021, a 6.4% increase year over year, according to TransUnion’s latest annual filing with the Securities and Exchanges Commission.

In the lawsuit, the CFPB alleges that TransUnion, its subsidiary, and its executive vice president misled consumers by automatically enrolling them into a monthly credit monitoring service when consumers thought they were only requesting a free, one-time credit report. Consumers were charged for the credit reporting service; the CFPB claims they were tricked into providing their payment information while providing identification information. The CFPB says that only a low-contrast, fine print statement showed that they were enrolling in a monthly subscription. A required opt-in button was not present, the CFPB says.

In another example, the lawsuit references TransUnion’s website and its offering of a mortgage calculator. Consumers who clicked on a link that said they were “not sure” what their credit score is would be directed into credit monitoring enrollment.

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

TransUnion issued a public statement saying the claims were “meritless.” The credit reporting agency claimed it has complied with a 2017 consent order even though the CFPB did not provide it with guidance. The 2017 order referenced is when the CFPB settled charges with TransUnion and its subsidiaries for alleged deceptive marketing of credit scores and credit-related products, including credit monitoring services. The settlement agreed to payment of restitution to those affected and an order that included the credit reporting giant required to have informed consent of consumers for recurring payments for subscription products or services as well as providing an easy way for people to cancel subscriptions.

But TransUnion says the 2017 consent order’s guidance was unclear. “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, including naming a former executive in the complaint,” TransUnion’s statement says. “The CFPB’s unrealistic and unworkable demands have left us with no alternative but to defend ourselves fully.”