The Office of Consumer Financial Protection is suing TransUnion and one of the longtime executives of the credit reporting giant for allegedly continuing to use deceptive marketing and sales tactics.
TransUnion tricked people into making recurring payments after being previously fined for the activity, the consumer watchdog agency said in a press release on Tuesday. The CFPB said it received close to 150,000 complaints about TransUnion in 2021 alone.
“TransUnion is an out-of-control recidivist who believes it is above the law,” CFPB director Rohit Chopra said in a statement. “I’m concerned that TransUnion’s leadership is unwilling or unable to operate its business legally.”
Specifically, TransUnion is used “Dark patterns” – or hidden tricks – To get people to inadvertently click on links to buy subscriptions, products or services, which are then difficult to cancel, the lawsuit argues.
For example, Americans are legally entitled to a free credit report. But those who applied for one at TransUnion were asked to provide credit card information that appeared to be part of an identification verification process, but in reality consumers signed up for monthly charges. appellants, the agency alleges.
TransUnion dismissed the allegations as “unfair” and said the allegations “do not in any way reflect the first consumer approach we take to run our business”.
“Failed repeatedly”
“Danaher was bound by the 2017 order, but repeatedly failed to ensure that TransUnion took certain required measures and refrained from prohibited conduct,” the CFPB said. “In fact, Danaher determined that complying with the order would reduce the company’s revenue, so he created a plan to delay or avoid having to execute the order.”
In an unusual move, the CFPB called in John Danaher, a former TransUnion executive who recently left the company. Although he was required by the 2017 order, Danaher allegedly decided not to comply with it, as it would have cut the company’s revenue, which reached $ 3 billion last year, the agency said. .
The only way consumers knew they were making a purchase was to notice a low-contrast disclosure in small print next to the registration form, with the image taking up to 30 seconds longer to load than the rest of the material. . This led to thousands of complaints to the CFPB, the agency said.
TransUnion agreed in early 2017 to pay $ 13.9 million in restitution to victims and $ 3 million in civil penalties to settle charges that the Chicago-based company and its subsidiaries deceived people into marketing services and credit-related products.
The agreement with the CFPB includes an order requiring the company to obtain informed consent from individuals for recurring payments and provides an easy way to cancel subscriptions. The CFPB found that TransUnion was still violating its agreement and law in June 2020.
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