The Consumer Financial Protection Bureau fined Equifax and TransUnion for providing consumers with credit scores not actually used by most lenders in making credit decisions.

James Rufus Koren
January 4, 4016

All credit scores are not created equal.

That’s the upshot of federal enforcement actions levied Tuesday against credit bureaus Equifax and TransUnion.

The bureaus will pay penalties of $23.1 million as part of a settlement with the Consumer Financial Protection Bureau, which said the firms misled consumers into paying for credit scores that might be dramatically different from the scores used by lenders.

Mortgage lenders, credit card companies and others generally use the ubiquitous FICO score, calculated by San Jose firm Fair Isaac Corp. But the CFPB alleged that TransUnion and Equifax sold customers their own in-house scores and improperly implied that those were the scores lenders check.

The CFPB also said the companies used the promise of free or cheap credit scores to hook consumers into costly monthly credit-monitoring subscriptions. The two companies will pay $5.5 million in fines plus $17.6 million in restitution to consumers to settle with the CFPB.

“Credit scores are central to a consumer’s financial life, and people deserve honest and accurate information about them,” CFPB Director Richard Cordray said in a statement. “TransUnion and Equifax deceived customers about the usefulness of the credit scores they marketed.”

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