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posted by janrinok on Friday January 06 2017, @04:51AM   Printer-friendly
from the colour-me-surprised dept.

In personal finance, practically everything can turn on one's credit score. It's both an indicator of one's financial past, and the key to accessing necessities—without insane costs—in the future. But on Tuesday, the Consumer Financial Protection Bureau announced that two of the three major credit-reporting agencies responsible for doling out those scores—Equifax and Transunion—have been deceiving and taking advantage of Americans. The Bureau ordered the agencies to pay more than $23 million in fines and restitution.

In their investigation, the Bureau found that the two agencies had been misrepresenting the scores provided to consumers, telling them that the score reports they received were the same reports that lenders and businesses received, when, in fact, they were not. The investigation also found problems with the way the agencies advertised their products, using promotions that suggested that their credit reports were either free or cost only $1. According to the CFPB the agencies did not properly disclose that after a trial of seven to 30 days, individuals would be enrolled in a full-price subscription, which could total $16 or more per month. The Bureau also found Equifax to be in violation of the Fair Credit Reporting Act, which states that the agencies must provide one free report every 12 months made available at a central site. Before viewing their free report, consumers were forced to view advertisements for Equifax, which is prohibited by law.


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  • (Score: 4, Insightful) by bzipitidoo on Friday January 06 2017, @07:47AM

    by bzipitidoo (4388) on Friday January 06 2017, @07:47AM (#450138) Journal

    This $23 million penalty sounds like a very weak wrist slapping. When do the people responsible for the fraud and lying go to prison for it? That's how to put the brakes on Wall Street crime. Otherwise, why not whistle past the graveyard? Why not say and do the most outrageous, nakedly self-interested brassy robbery of everyone else's money? Not like there will be any consequences that matter to them. You can even get elected to the Presidency of the US after robbing everyone blind.

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  • (Score: 0, Redundant) by Anonymous Coward on Friday January 06 2017, @12:28PM

    by Anonymous Coward on Friday January 06 2017, @12:28PM (#450187)

    No, she lost.

    • (Score: 0) by Anonymous Coward on Friday January 06 2017, @01:48PM

      by Anonymous Coward on Friday January 06 2017, @01:48PM (#450204)

      Heh. I'm not sure, though. She still appears to be winning. Will be watching the next four years to see whether or not the international bankers are still running the world. I'm guessing they will be.

  • (Score: 0) by Anonymous Coward on Friday January 06 2017, @12:58PM

    by Anonymous Coward on Friday January 06 2017, @12:58PM (#450191)

    Solution: make these fines a percentage of revenue (not profit, revenue!)

  • (Score: 3, Insightful) by AthanasiusKircher on Friday January 06 2017, @02:24PM

    by AthanasiusKircher (5291) on Friday January 06 2017, @02:24PM (#450214) Journal

    This $23 million penalty sounds like a very weak wrist slapping.

    Agreed. Credit reports affect people's LIVES in MAJOR ways. Frankly, I think it's reprehensible that consumers are not allowed to access their full credit reports and reported scores AT ANY TIME FOR FREE. Now, I'm sure some libertarian folks out there are going to respond and tell me that these are "private businesses" and shouldn't be compelled to offer such service -- but the credit agencies have too much power not to hold them accountable.

    And yeah, I'm sure that will lead some folks to say, "But, but, but... people will 'game the system' with their credit scores if they can see those details and how they change all the time!" So what? The idea that your reputation with money can somehow be summed up in just one number is idiotic anyway. At best, a credit score should be used as a very blunt instrument to say whether someone is (1) a complete disaster with money and paying bills, or (2) is reasonably responsible (but not perfect), or (3) there's no record of them ever missing a payment on anything. Whether you have a 720 vs. a 730 should NEVER make a difference in your ability to get a loan or whatever.

    If you're good enough with money to be able to make specific choices to "game the system" and move your number up from 810 to 820 or whatever, good for you... who cares?

    So, what's the big deal? Why are these agencies allowed to have SECRET numbers that only they know, but which they tell everyone else about you? We all complain about a lack of privacy from Facebook or whatever, but credit agencies are tallying most of your financial history and selling that info. It would be like Facebook had a service that created a dossier on what your friends say about you behind your back and would sell it to a prospective employer or landlord. But Facebook would refuse to show it to you unless you paid them. (Well, with new regulation, you can look at it once per year if you bother to seek it out.) Wouldn't people be outraged?

    I fully understand the need to have something like these services today, particularly for evaluating someone for loans or other financial decisions. But given their power over people's lives, they NEED to be publicly accountable. The fact that they were claiming to give people their credit scores but showing 3rd parties different credit scores is simply beyond reprehensible... beyond outrageous. Every single person involved in the decision to do that should be in prison.

    • (Score: 3, Interesting) by Kromagv0 on Friday January 06 2017, @03:04PM

      by Kromagv0 (1825) on Friday January 06 2017, @03:04PM (#450231) Homepage

      I'm pretty libertarian but why can't companies be charged with stalking. If I, as a private individual, amassed the amount of information credit rating agencies and other data brokers have on just one individual I would be charged with stalking. Why can't some state attorney general go and do the same to a company. I also wonder if it is possible to get a restraining order against a company.
       
      I have a special hatred of companies that work in and around the area of credit. Lenders who don't have their shit together when you are trying to pay off a loan in its entirety who then try to convince you to keep the loan. Credit reporting agencies who make it difficult and time consuming to clear up obvious errors. Debt collectors who screw the pooch and go after someone who is obviously the wrong person. About the only credit company I haven't had a problem with is my credit card company and the one time I had some fraudulent charges on my card I called them and they took them off without issue and then asked if I wanted to have them cancel that card and send me out a new one immediately which arrived in like 2 or 3 days.

      --
      T-Shirts and bumper stickers [zazzle.com] to offend someone
  • (Score: 2) by tempest on Friday January 06 2017, @03:28PM

    by tempest (3050) on Friday January 06 2017, @03:28PM (#450251)

    I agree $23 million seems low and some folks going to jail seems appropriate. They were violating federal law.

    I got hit by this scam from Transunion. After listening to a talk, I decided to check my credit score as was recommended - Federal Law that they have to provide it for free so why not?. Got hit by a "subscription" a month later. I don't know how these assholes got away with this for so long. While I'd like to keep an eye on my credit score, especially after finding interesting "mistakes" on my credit history, I don't want to pay money for it and certainly not give any more info to these scummy organizations.

  • (Score: 2) by DeathMonkey on Friday January 06 2017, @07:48PM

    by DeathMonkey (1380) on Friday January 06 2017, @07:48PM (#450373) Journal

    When do the people responsible for the fraud and lying go to prison for it? That's how to put the brakes on Wall Street crime.

    I'm sure Steven Mnuchin, a former partner at Goldman Sachs and Trump's finance adviser is going to get right on that.

    And if he doesn't get it done, I'm sure Jay Clayton, Quintessential Wall Street Lawyer and Goldman Sachs Advisor will get right on it as head of the SEC.

    And if it really comes down to brass tacks, then Gary Cohn, the president and chief operating officer of Goldman Sachs, assistant to the president for economic policy and director of the national economic council will surely take action.