The Consumer Financial Protection Bureau sued TransUnion and a former senior company executive for allegedly violating the terms of a 2017 settlement regarding deceptive marketing and sales practices.
The lawsuit alleges that TransUnion, two of its subsidiaries, and John Danaher – an executive who ran TransUnion Interactive – continued to engage in “digital dark models” that drove consumers seeking free credit scores to unknowingly signing up for a credit monitoring service with recurring monthly payments. charges.
Danaher and TransUnion violated the terms of the settlement from “day one,” according to the lawsuit filed Tuesday in U.S. District Court for the Northern District of Illinois.
“Rather than quickly resolving these obvious repeat offenders by fully redressing victims and making changes to its business to ensure these violations never happen again, TransUnion’s conduct has made it clear that the company is an out-of-control repeat offender who must be held accountable,” CFPB Director Rohit Chopra said in a call with reporters announcing the enforcement action.
TransUnion said the CFPB’s claims against the company and Danaher “are without merit and in no way reflect the consumer-focused approach we take to running all of our businesses.”
The credit reporting company reimbursed consumers $13.9 million and paid a civil penalty of $3 million as part of the 2017 settlement.
TransUnion also then agreed to policy changes that sought to prevent consumers from unknowingly signing up for credit monitoring services that charge monthly payments.
The 2017 settlement followed the CFPB’s finding that TransUnion was automatically signing people up for credit monitoring services ranging from $9.99 to $24.99 a month when they thought they were checking their credit scores. , which was either free or $1.
The CFPB alleges in the latest complaint that TransUnion, under the leadership of Danaher, retained many of the problematic features even after agency reviewers and enforcement staff raised the issue in 2018, 2019 and 2020.
An example provided by the CFPB was that TransUnion failed to use a form and checkbox that would have required consumers to affirmatively select that they wanted to pay for credit monitoring services. The financial services regulator says Danaher instructed its team not to include the checkbox because it would lead to fewer people signing up for credit monitoring services.
Danaher’s actions led to millions of signups for TransUnion’s credit monitoring services, the CFPB said.
Danaher stepped back from a leadership role at TransUnion and became an adviser in April 2021, according to an April 2021 filing with the Securities and Exchange Commission. He then retired in February.
Chopra told reporters he did not take the prosecution of Danaher, or any other individual defendants, “lightly.”
But other TransUnion executives could be held accountable if “we uncover evidence of wrongdoing,” he said.
The CFPB will also continue to focus on prosecuting repeat offenders, Chopra said. Dedicated units within the office’s enforcement and monitoring teams will focus on companies that have already been subject to enforcement action.
The CFPB will also work with other law enforcement and regulatory agencies when repeat violations occur, he said.
“Agency and court orders are not suggestions, and we are taking steps to ensure companies under our jurisdiction do not commit repeat violations,” he said.
Cause of Action: Violations of Consent Order; deceptive acts and practices; substantial assistance; violation of the Electronic Funds Transfer Act and E&V Regulations; violation of the Consumer Financial Protection Act.
Relief: Compensation and reimbursement of the consumer; civil monetary penalties; injunctive relief.
Lawyers: CFPB lawyers represent the agency.
The case is CFPB v. Trans UnionND Ill., No. 1:22-cv-01880, complaint of 04/12/22.