Experian will pay a $3 million fine to the Consumer Financial Protection Bureau to settle allegations it deceived consumers about the use of credit scores it sold.
Experian, with its U.S. base in Costa Mesa, allegedly claimed the scores it provided to consumers were used by lenders in making loan decisions. Lenders, the CFPB said, did not use the company’s scores.
“Consumers deserve and should expect honest and accurate information about their credit scores, which are central to their financial lives,” said CFPB Director Richard Cordray in a statement.
Experian is one of the nation’s three largest credit reporting agencies, according to the CFPB. The company provides credit scores, credit reports, credit monitoring and other related products.
Experian developed its own scoring model which it used to generate a credit score. Those scores, however, were not used by lenders for credit decisions.
From 20012 through 2014, the company deceived consumers about the use of the credit scores, according to the CFPB.
“While we do not believe our practices violated the law and did not admit to any of the allegations, in the interest of moving our business forward and staying focused on delivering an exceptional product and service experience to our clients and consumers, Experian has accepted the consent order,” the company said in a statement.
Experian, in its statement, said the consent order addressed past products and marketing disclosures and “does not reflect current marketing practices.”
The company said it would execute all actions directed by the CFPB; except for limited changes, and that its current marketing practices were already compliant.
TransUnion and Equifax, the country’s two other largest credit bureaus, reached a $23.1 million settlement in January. The two were accused of misleading consumers who paid for for credit scores that were different from scores used by lenders.
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