Millions of consumers who were duped into paying fees for their own credit scores will soon receive more than $17.6 million, thanks to the Consumer Financial Protection Bureau. Affected consumers can expect to receive notification letters in the mail.
TransUnion and Equifax, two of the nation’s largest credit reporting agencies, sold credit scores, credit reports and credit monitoring services to consumers even though the “credit scores” sold were not typically used by lenders to make credit decisions. As a result, what consumers paid to these two firms was of questionable value.
As credit scores are often cited as the basis for many consumers of color to either be denied access to credit or be charged higher than average interest rates, it is likely that many will also be eligible for restitution. TransUnion must now provide restitution of $13.9 million to affected consumers, while Equifax’s cost of restitution is $3.8 million. Assessed fines on the violations will add additional costs of $3 million to TransUnion and $2.5 million for Equifax.
“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.”
Both TransUnion and Equifax are charged with violations of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act from 2011 to 2014 and included: