.svg)
The US consumer watchdog is suing TransUnion, alleging the credit agency used deceitful digital dark patterns and violated consumer financial protection laws.
The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against TransUnion, two of its subsidiaries and executive John Danaher for violating a 2017 law enforcement order, which directed the firm to stop deceptive marketing of its credit scores and other credit-related products.
“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB director Rohit Chopra.
“I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”
TransUnion is one of the big three credit reporting agencies in the US. It collects information on 200m people and claims to profile “nearly every credit-active consumer in the United States”.
According to the CFPB, TransUnion used a number of dark patterns when marketing its credit scores to consumers. A dark pattern is a term used to describe a user interface that has been carefully crafted to trick users into doing things.
The CFPB said that TransUnion tricked people into recurring payments and made it difficult to cancel them.
For example, under federal law, Americans are entitled to a free TransUnion credit report from annualcreditreport.com. TransUnion asked consumers to provide credit card information that appeared to be part of an identity verification process.
TransUnion then integrated 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.
Although the enrollment process ended with a low contrast disclosure notice, the CFPB noted it was located off to the side of the enrolment form and was part of 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 consumer watchdog said, adding that TransUnion “actively made it arduous for consumers to cancel through clever uses of font and colour on its website”.
Danaher, who was a top executive of TransUnion’s credit score selling subsidiary, was also bound by the 2017 order but willingly took steps against its terms, which led to millions of new enrolments.
The suit comes hot on the heels of Chopra making headlines with his speech about repeat offenders.
Among all, he called the worst type of repeat offender those that violate a formal court or agency order; “this is especially egregious because they often consented to the terms as part of a settlement”, he said.
“We must forcefully address repeat lawbreakers to alter company behaviour and ensure companies realise it is cheaper, and better for their bottom line, to obey the law than to break it,” Chopra warned.
The CFPB is now seeking an order to stop the unlawful practices.
As part of the 2017 settlement, TransUnion paid $13.9m in restitution to victims and $3m in civil penalties.
