CFPB charges TransUnion and executive with violating 2017 order

The Consumer Financial Protection Bureau on Tuesday announced it has filed a lawsuit against TransUnion, two of its subsidiaries, and longtime executive John Danaher for violating a 2017 law enforcement order that was issued to stop the company from engaging in deceptive marketing, regarding its credit scores and other credit-related products. The Bureau alleges that TransUnion disregarded the order's requirements and continued using deceitful dark patterns — hidden tricks or trapdoors companies build into their websites to get consumers to inadvertently click links, sign up for subscriptions or purchase products or services — to profit from customers. The CFPB also alleges that TransUnion violated additional consumer financial protection laws.

On January 3, 2017, the CFPB settled charges with TransUnion and its subsidiaries for deceptively marketing credit scores and credit-related products, including credit monitoring services. As part of the settlement, TransUnion agreed to pay $13.9 million in restitution to victims and $3 million in civil penalties. TransUnion and its subsidiaries also agreed to a formal law enforcement order that, among other things, required the credit reporting giant to (1) warn consumers that lenders are not likely to use the scores they are supplying, (2) obtain the express informed consent of customers for recurring payments for subscription products or services, and (3) provide an easy way for people to cancel subscriptions. The order was binding on the company, its board of directors, and its executive officers.

The Bureau's complaint alleges TransUnion used an array of dark patterns to trick people into recurring payments and to make it difficult to cancel them. For example, under federal law, Americans are entitled to a free credit report from TransUnion through annualcreditreport.com. TransUnion asked consumers to provide credit card information that appeared to be part of an identity verification process. TransUnion then integrated deceptive buttons into the online interface that gave the impression that the consumer could also access a free credit score in addition to viewing their free credit report. In reality, clicking this button signed consumers up for recurring monthly charges using the credit card information they had provided. The only indication in the enrollment process that consumers were making some sort of purchase was through a fine print, low contrast disclosure, located off to the side of the enrollment form. The disclosure is inside an image that can take up to 30 seconds longer to load than the rest of the material in the form. This dark pattern triggered thousands of complaints.

The CFPB alleges that TransUnion has knowingly violated the 2017 order, Regulation V, which implements the Fair Credit Reporting Act, and Regulation E, which implements the Electronic Fund Transfer Act, and is seeking monetary relief for consumers, such as restitution or return of funds, disgorgement or compensation for unjust gains, injunctive relief, and civil money penalties.