The Consumer Financial Protection Bureau took action against Experian and its subsidiaries for deceiving consumers about the use of credit scores it sold to consumers.
Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. In fact, lenders did not use Experian’s scores to make those decisions.
The CFPB ordered Experian to truthfully represent how its credit scores are used. Experian must also pay a civil penalty of $3 million.
Experian developed its own proprietary credit scoring model, referred to as the “PLUS Score,” which it applied to information in consumer credit files to generate a credit score it offered directly to consumers. The PLUS Score is an “educational” credit score and is not used by lenders for credit decisions.
From at least 2012 through 2014, Experian violated the Dodd-Frank Wall Street Reform and Consumer Protection Act by deceiving consumers about the use of the credit scores it sold. In its advertising, Experian falsely represented that the credit scores it marketed and provided to consumers were the same scores lenders used to make credit decisions. In fact, lenders did not use the scores Experian sold to consumers.
In some instances, there were significant differences between the PLUS Scores that Experian provided to consumers and the various credit scores lenders actually use. As a result, Experian’s credit scores in these instances presented an inaccurate picture of how lenders assessed consumer creditworthiness.