Credit Reporting Giants Caught Defrauding Their Customers

Today's edition of corporate crime comes from the credit reporting giants Equifax and TransUnion. The two have been fined a combined $5.5 million fine for deceiving their customers. The two are also required to pay nearly $18 million in restitution to those customers they defrauded, about $14 million for TransUnion and nearly $4 million for Equifax. The companies promised customers that credit reporting would be free or cost just $1 but in actuality charged them up to $200 for the reports. In addition, the companies said that they were providing their customers with the very same credit reports that they would be providing to lenders but that was patently false.

The companies were accused of violating Dodd-Frank laws and the fines and restitutions cover the period from 2011 onward. It's possible that the reason the period only goes back to 2011 is because that is when the Consumer Financial Protection Bureau (CFPB), which is enforcing this action, came into being. Needless to say, Republicans want to dismantle the CFPB and will probably be able to successfully strangle it in the next year or two. The credit reporting agencies already settled with a large number of state's Attorney Generals in 2015 over the difficulty customers had in erasing clear mistakes from their credit reports and settling disputes about those reports with their customers.

Of course, the companies denied any wrongdoing and claimed they were abiding by the law. A skeptical person like myself might wonder how the companies were unaware that the reports being sent to customers were different from the ones being sent to lenders or that they were charging customers for what the companies advertised as free reports. On the other hand, since the companies were being charged for violating Dodd-Frank, it's quite possible they were, in fact, obeying the law before Dodd-Frank came into effect. That would be even more depressing. In any case, we all know that, as opposed to us mere citizens, companies never engage in any wrongdoing. At worst, they just misinterpret the law. Sadly, for us mere citizens, that defense rarely succeeds.