CFPB slaps TransUnion with $17 million penalty

by Ryan Smith03 Jan 2017

Credit reporting agency TransUnion has been slapped with a $17 million penalty by the Consumer Financial Protection Bureau, the company has revealed.

TransUnion revealed in an SEC filing late last week that it will pay just under $17 million to settle a CFPB probe of its advertising and marketing practices.

TransUnion said the CFPB made a “civil investigative demand” in September about what the company said were “common industry practices” related to the marketing of credit reports and credit monitoring products.

However, the investigation resulted in not only tan agreement to repay millions of dollars to consumers, but a pledge from TransUnion to change its advertising practices, according to a HousingWire report.

TransUnion will pay $13.9 million for “redress” to eligible consumers, and an additional $3 million to the CFPB, HousingWire reported.

TransUnion has also agreed to develop “more robust” disclosures about the credit scores it provides, and confirm consumer consent if the product it’s selling is being sold through a “negative option” feature — for example, a trial period that automatically becomes a recurring charge unless the customer cancels their subscription. TransUnion will also be required to submit a comprehensive plan on how it will address each action required by the CFPB, along with deadlines to implement the changes, HousingWire reported.

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Should CFPB have more supervision over credit agencies?