Continuing violations of a 2017 enforcement order to stop deceptive marketing have led to a lawsuit against one of the three largest credit reporting firms and one of its longtime executives by the federal consumer financial protection agency, the agency said Tuesday.
According to the Consumer Financial Protection Bureau (CFPB), the lawsuit against TransUnion, two of its subsidiaries and executive John Danaher alleges that despite the 2017 order regarding deceptive marketing in credit scores and other credit-related products, the firm “continued its unlawful behavior, disregarded the order’s requirements, and continued employing deceitful digital dark patterns to profit from customers.”
The bureau’s lawsuit additionally alleged that TransUnion violated additional consumer financial protection laws.
In a statement, CFPB Director Rohit Chopra charged that TransUnion is an “out of control repeat offender that believes it is above the law.”
According to the CFPB, its lawsuit claims that TransUnion used an array of “dark patterns” to trick people into recurring payments and to make it difficult to cancel them. The agency described “dark patterns” as hidden tricks or trapdoors companies built into websites to get consumers to inadvertently click links, sign up for subscriptions, or purchase products or services. “Dark patterns can complicate or hide information, such as making it difficult for consumers to cancel a subscription service,” the CFPB said.
As an example, the bureau pointed to the system TransUnion used to sign up consumers for free credit reports, as provided for under federal law. According to the agency, TransUnion asked consumers to provide credit card information that appeared to be part of an identity verification process. “TransUnion then integrated deceptive 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,” the CFPB alleged.
A disclosure that some sort of purchase was made and provided, the CFPB said, but appeared through a fine print, low-contrast disclosure located off to the side of the enrollment form. The disclosure is inside an image that can take up to 30 seconds longer to load than the rest of the material in the form, the CFPB said. “This dark pattern triggered thousands of complaints,” it said.
“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 CFPB said.
Regarding Danaher, a top executive of TransUnion Interactive – a unit, the agency said, that sold products and services directly to consumers – the CFPB noted that he was also bound by the 2017 agreement. Yet, “He repeatedly failed to ensure that TransUnion took certain required steps and refrained from prohibited conduct,” the CFPB said. “In fact, Danaher determined that complying with the order would reduce the company’s revenue, so he created a plan to delay or avoid having to implement the order.”
The agency said its lawsuit seeks monetary relief for consumers, such as restitution or return of funds, disgorgement or compensation for unjust gains, injunctive relief, and civil money penalties.