Transunion, one of the nation’s largest credit reporting agencies, will pay just shy of $17 million as part of a settlement with the Consumer Financial Protection Bureau over the company’s advertising and marketing practices, the company disclosed late this week.
Transunion revealed the settlement in a December 29 filing with the Securities and Exchange Commission.
According to Transunion’s SEC filing, the settlement stems from a “civil investigative demand” from the CFPB that the company received in September 2015.
Transunion said that the CFPB’s request covered “common industry practices relating to the advertising, marketing and sale of consumer reports, credit scores or credit monitoring products to consumers.”
Now, as a result of that investigation, Transunion is settling with the CFPB, pledging to change the way it advertises its services, and preparing to replay millions to affected consumers.
According to Transunion, the agreement with the CFPB, which is not yet finalized, will see the company provide $13.9 million for “redress” to eligible consumers.
Transunion will also pay a civil money penalty of $3 million to the CFPB.
The company also said that it has agreed to change its business practices in the following ways:
- Implement certain agreed practice changes in the way TransUnion advertises, markets and sells products and services offered directly to consumers, including more robust disclosures regarding the nature of the credit score being provided as well as confirming consumer consent if the product or service is being sold through the use of a negative option feature (i.e., a trial period becomes a recurring paid subscription unless the consumer affirmatively cancels their registration)
- Develop and submit to the CFPB for approval a comprehensive compliance plan detailing the steps for addressing each action required by the terms of the Consent Order and specific time frames and deadlines for implementation
Transunion said that it will also incur an estimated cost of $2.5 million for “additional administrative, legal and compliance costs” as part of the settlement.
In total, Transunion said that it is setting aside $19.4 million to cover the costs of the settlement.
According to Transunion’s SEC filing, the settlement agreement will now go to CFPB Director Richard Cordray for final approval.