The Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) have reached two settlements totaling $23 million with consumer credit reporting agency TransUnion, stemming from issues related to its rental background check reports and alleged failure to honor security freeze and lock requests, respectively.
TransUnion “failed to take steps to ensure the rental background checks that landlords use to decide who gets housing were accurate,” and “withheld, from renters, the names of third parties that were providing the inaccurate information,” the agencies said in a joint statement, leading to an initial $15 million settlement.
Separately, the CFPB is ordering the company to pay an additional $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,” alleging that TransUnion informed customers that such requests were completed when they were instead “dumped into its yearslong backlog,” the agencies said.
TransUnion maintains that the settlements are not admissions of wrongdoing and that processes at the center of both actions have been refined.
Sources of settlement actions
The agencies also allege that TransUnion failed to take action to specifically protect active-duty members of the military from falling victim to identity theft.
“Americans across the country were put at risk of wrongful housing denials because TransUnion failed to follow the law,” said CFPB Director Rohit Chopra in a statement. “We are ordering TransUnion to cease its yearslong illegal activity, clean up its broken business practices, redress its victims, and pay penalties.”
Samuel Levine, director of the FTC’s Bureau of Consumer Protection, added that consumers who may have issues finding housing “shouldn’t be shut out by tenant screening reports that are ridden with errors and based on data from secret sources,” he said.
Through the alleged failure to produce accurate rental background check reports, CFPB says that TransUnion violated the Fair Credit Reporting Act (FCRA) “by failing in numerous instances to take steps to assure the maximum possible accuracy of eviction records in its rental background check reports,” the joint statement said.
The company also failed to identify sources of inaccurate information, in addition to failing to place or remove security freezes or locks in a timely fashion and failing to place certain populations from pre-screened solicitation lists, the agencies alleged.
Between the two enforcement actions, TransUnion will be required to pay $14 million directly to consumers, pay $9 million in penalties and reform its practices.
TransUnion response
When reached, TransUnion acknowledged the settlements but maintained that they are not admissions of wrongdoing.
“Over the past year, we have worked with the CFPB and FTC to enhance our rental screening reporting practices, including making certain changes to how eviction records are reported,” the company said in a statement provided to HousingWire. “We believe these changes will soon become industry standard. This settlement reflects the agencies’ evolving regulatory objectives and our openness to join them in reasonable initiatives that are beneficial to consumers and support safe, affordable housing.”
In regards to the timeliness of freeze and lock requests, TransUnion claims that it has “enacted enhancements to ensure timely placement and removal of security freezes and locks.” The company also said that the underlying issues were corrected in 2020, and that it has “processes in place to monitor and address any issues going forward.”
