These reports increasingly use black box algorithms, relying too often on inaccurate or misleading information, to produce a renter’s “risk score” or to make a recommendation to landlords. The CFPB has previously highlighted widespread problems in the use of rental background check reports. CFPB and FTC Enforcement Action Against TransUnion for Its Rental Background Check Reports In that action, the CFPB alleges the company, along with a longtime former executive, violated the order and other federal consumer financial laws by tricking consumers into signing up for subscription products with costly recurring payments. In a lawsuit filed in April 2022, the CFPB alleges that, instead of following the order, TransUnion continued to dupe Americans into its costly subscription plans. These actions lured in consumers and trapped them in costly recurring payment plans. TransUnion had deceptively misstated the cost and usefulness of its credit scores and credit-related products. In 2017, the CFPB issued an order against TransUnion for luring consumers into costly subscription plans. In addition to today’s two actions for rental background check and security freezes failures, the CFPB has taken repeated actions against TransUnion for its subscription plans. In the last seven years, the TransUnion conglomerate has been subject to four CFPB law enforcement actions across various products. TransUnion also provides rental background check reports that may include information about individuals’ credit, criminal, and eviction histories through its subsidiary TransUnion Rental Screening Solutions. While locks are a feature of certain paid products, starting in September 2018, the Fair Credit Reporting Act has required nationwide consumer reporting companies to provide security freezes as a free service. As a nationwide consumer reporting company, it provides security freezes and security locks of individuals’ consumer reports. TransUnion had annual revenue in excess of $3.7 billion in 2022, and collects information on more than 200 million Americans, including information on their payment histories, debt loads, maximum credit limits, names and addresses of current creditors, and other elements of their credit relationships. TransUnion operates one of the three nationwide consumer reporting companies. TransUnion (NYSE: TRU) is a Delaware company with its principal places of business in Chicago. “Protecting consumers looking for housing is critical to a fair economy, and we are proud to partner with the CFPB in obtaining this record-breaking order.” “Consumers struggling to find housing shouldn’t be shut out by tenant screening reports that are ridden with errors and based on data from secret sources,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “We are ordering TransUnion to cease its yearslong illegal activity, clean up its broken business practices, redress its victims, and pay penalties.” “Americans across the country were put at risk of wrongful housing denials because TransUnion failed to follow the law,” said CFPB Director Rohit Chopra. The Fair Credit Reporting Act also now requires that companies respond timely to consumer requests to place or remove security freezes – a tool which, along with credit locks, helps prevent potential identity theft by blocking many third parties from accessing consumers’ credit reports. In 2018, Congress enacted legislation to require TransUnion and other credit reporting conglomerates to offer free security freezes to the public, as well as the enhanced protections for active-duty members of the military. TransUnion also failed to keep active-duty members of the military from pre-screened solicitation lists – a simple step which protects servicemembers from identity theft. The company told consumers the requests were completed when, in reality, the requests were dumped into its yearslong backlog. Separately, the CFPB is ordering TransUnion to pay $8 million for lying to consumers about timely placing or removing security freezes and locks on the credit reports of tens of thousands of consumers. The CFPB and FTC requested a federal court to order the TransUnion company to pay $15 million for its lawbreaking behavior and to make significant improvements to how it reports evictions. The company also withheld, from renters, the names of third parties that were providing the inaccurate information. The TransUnion company failed to take steps to ensure the rental background checks that landlords use to decide who gets housing were accurate. – Today, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) took action against a rental screening subsidiary of the TransUnion conglomerate for violations of the Fair Credit Reporting Act.
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