CFPB fines Experian $3M, alleges consumer deception

Register now

WASHINGTON — The Consumer Financial Protection Bureau on Thursday fined the consumer credit reporting agency Experian $3 million for allegedly deceiving consumers about credit scores and forcing them to view an advertisement to get a free credit report.

The CFPB said Experian, based in Costa Mesa, Calif., sold consumers an "educational" credit score and falsely claimed in advertisements that the score was used by lenders to make credit decisions. In fact, lenders do not use the credit scores that Experian sells to consumers.

Experian also violated the Fair Credit Reporting Act by requiring that consumers view an Experian advertisement before being given a free credit report, the CFPB said.

“Experian deceived consumers over how the credit scores it marketed and sold were used by lenders,” CFPB Director Richard Cordray said in a press release. “Consumers deserve and should expect honest and accurate information about their credit scores, which are central to their financial lives.”

The fine against Experian comes two months after the CFPB levied more than $23 million in fines and restitution against the two other credit reporting giants, Chicago-based TransUnion and Atlanta-based Equifax, for allegedly deceiving consumers into paying for data that had little beneficial value.

Experian did not admit to any of the allegations and said it does "not believe our practices violated the law."
"In the interest of moving our business forward … Experian has accepted the consent order," the company said in an emailed statement. "The consent order addresses past products and marketing disclosures and does not reflect current marketing practices."

In addition to paying a $3 million fine, Experian agreed to inform consumers about the nature of the credit scores it sells to them. It also must develop and implement an advertising plan that complies with the consent order and ensure consumers can access to receive a free credit score.

For reprint and licensing requests for this article, click here.
Enforcement actions Credit reporting CFPB Experian