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The Consumer Financial Protection Bureau sued TransUnion and a former top company executive for allegedly violating the terms of a 2017 settlement over deceptive marketing and sales practices.
The suit alleges that TransUnion, two of its subsidiaries, and John Danaher—an executive who led TransUnion Interactive—continued to engage in “digital dark patterns” that caused consumers seeking free credit scores to unknowingly sign up for a credit monitoring service with recurring monthly charges.
Danaher and TransUnion violated the settlement terms from “day one,” according to the complaint filed Tuesday in the U.S. District Court for the Northern District of Illinois.
“Rather than quickly resolve these clear repeat offenses by fully redressing victims and making changes to its business to ensure these violations never recur, TransUnion’s conduct has made it crystal clear that the company is an out-of-control repeat offender that must be held accountable,” CFPB Director Rohit Chopra said on a call with reporters announcing the enforcement action.
TransUnion said the CFPB’s claims against the company and Danaher “are meritless and in no way reflect the consumer-first approach we take to managing all our businesses.”
The credit reporting company returned $13.9 million to consumers and paid a $3 million civil money penalty under the 2017 settlement.
TransUnion also agreed then to policy changes that were intended to stop consumers from unknowingly signing up for credit monitoring services that charge monthly payments.
The 2017 settlement followed the CFPB’s finding that TransUnion automatically enrolled people into credit monitoring services that ranged from $9.99 to $24.99 per month when they thought they were checking their credit scores, which was either free or $1.
Repeat Offender
The CFPB alleges in the latest complaint that TransUnion, at Danaher’s direction, kept many of the problematic features even after agency examiners 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 claims that Danaher instructed his team not to include the checkbox because it would lead to fewer people enrolling in credit monitoring services.
Danaher’s actions led to millions of enrollments in TransUnion credit monitoring services, the CFPB said.
Danaher stepped back from a leadership role at TransUnion and became an advisor in April 2021, according to an April 2021 filing with the Securities and Exchange Commission. He then retired in February.
Chopra told reporters that he didn’t take bringing charges against Danaher, or any individual defendant, “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 bringing cases against repeat offenders, Chopra said. Dedicated units within the bureau’s enforcement and supervision teams will focus on companies that have already been subject to enforcement actions.
The CFPB also will 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 that firms under our jurisdiction do not engage in repeat offenses,” he said.
Cause of Action: Violations of consent order; deceptive acts and practices; substantial assistance; violation of Electronic Fund Transfer Act and Regulations E and V; violation of the Consumer Financial Protection Act.
Relief: Consumer restitution and refunds; civil money penalties; injunctive relief.
Attorneys: CFPB attorneys are representing the agency.
The case is CFPB v. TransUnion, N.D. Ill., No. 1:22-cv-01880, Complaint 4/12/22.
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