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Government Sues TransUnion, Claiming Credit Reporting Giant Used Deceptive Marketing and Tricks to Extract Monthly Payments from Consumers

The nation’s top consumer watchdog Consumer Financial Protection Bureau (CFPB), is suing consumer credit reporting agency TransUnion and one of its former executives. The lawsuit accuses TransUnion of tricking consumers into making recurring payments after the company was fined in 2017 for similar activity. A former top executive is also accused of violating a 2017 law enforcement order that blocked the company from engaging in deceptive marketing practices.

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Filed on April 12 in federal court in Illinois, the lawsuit accuses John Danaher, who headed one of TransUnion’s subsidiaries, of not ensuring that the company stopped the deceptive activity, Reuters reported. Danaher retired from TransUnion in 2021.

“TransUnion is an out-of-control repeat offender that believes it is above the law,” CFPB Director Rohit Chopra said in a statement. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”

The suit seeks monetary relief for consumers, injunctive relief, and fines.

The case says the company deceptively marketed its credit report and credit-monitoring services to U.S. consumers by using “digital dark patterns” to “trick” them into buying subscriptions and make it difficult to cancel them. When consumers requested a free annual credit report the company is required to provide under federal law, TransUnion had them enter credit card information as part of what seemed to be an identity-verification process. The CFPB said TransUnion then “integrated deceptive buttons” into its website that made customers think they could access their credit score for free but they were instead charged on their credit cards, MarketWatch reported.

“In reality, clicking this button signed customers up for recurring monthly charges using the credit card information they had provided,” the CFPB said in a press release. “For consumers looking for a way out of their subscriptions, TransUnion not only failed to offer a simple mechanism for cancellation; it actively made it arduous for consumers to cancel through clever uses of font and color on its website.”

The bureau asks a court to order TransUnion and Danaher to refund money to customers, pay restitution to harmed consumers, and pay back “ill-gotten gains for unjustified enrichment.”

In a statement, TransUnion called the CFPB’s claims “meritless.”

“The claims made by the CFPB against TransUnion and John Danaher, a former executive, are meritless and in no way reflect the consumer-first approach we take to managing all our businesses,” TransUnion said in a statement in response to the lawsuit.

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