Two Major Credit Reporting Agencies Have Been Lying to Consumers (Equifax and Transunion)

Archived From: Finance
  • Page :
  • 1
  • Text Only
Voting History
rated:

Member Summary
Most Recent Posts
Don't bother arguing with him.  You'll just get rambling commentaries with little or nothing to do with the topic at han... (more)

cestmoi123 (May. 18, 2017 @ 2:35p) |

Cestmoi the standard is that a court decides on the narrowest basis possible. Here an erroneous interpretation of the s... (more)

nsdp (May. 18, 2017 @ 4:15p) |

Congratulations, you're capable of cutting and pasting the commentary of others, without providing due credit.  It was o... (more)

cestmoi123 (May. 18, 2017 @ 5:15p) |

Staff Summary
Thanks for visiting FatWallet.com. Join for free to remove this ad.

I was just thinking about this bs this week - advertising access to "the score that lenders use". It's not just untrue, there is no such thing. And the scoring agencies are responsible for that with their big menus of scoring systems with different implementations and I assume pricing.

Not defending the bait-and-switch tactics of these companies, but --

To say that the companies "prevented" consumers from "see[ing] accurate credit reports that reflect the information that lenders see when they assess them" is absurd.  The free annual credit reports available to everyone contain no less and no more information than what's available to lenders, with the exception of the algorithm-based "scores" that the the lender can separately purchase from the providers. CFPB and others are confusing raw information with analytical information.

Maybe the broader question is one of financial literacy.  I have a feeling that a great majority of the "credit invisibles" and "unscoreables" don't understand (or don't care to understand) how the system works.

Only two??

The whole idea of the score is so everyone is on the same page. It's a bait and switch period.

tuphat said:   Not defending the bait-and-switch tactics of these companies, but --

To say that the companies "prevented" consumers from "see[ing] accurate credit reports that reflect the information that lenders see when they assess them" is absurd.  The free annual credit reports available to everyone contain no less and no more information than what's available to lenders, with the exception of the algorithm-based "scores" that the the lender can separately purchase from the providers. CFPB and others are confusing raw information with analytical information.

Maybe the broader question is one of financial literacy.  I have a feeling that a great majority of the "credit invisibles" and "unscoreables" don't understand (or don't care to understand) how the system works.

  
The majority of the public go by the typical FICO score that's sold so to have your loan based on any other score is misleading and understandably upsetting when you find your interest rate is higher because the score on "their" reports show 50 points lower, whether that's true or not.  I know a lot of this BS is used in auto loans to strong arm the buyer into higher interest rates.
 

tuphat said:   Not defending the bait-and-switch tactics of these companies, but --

To say that the companies "prevented" consumers from "see[ing] accurate credit reports that reflect the information that lenders see when they assess them" is absurd.  The free annual credit reports available to everyone contain no less and no more information than what's available to lenders, with the exception of the algorithm-based "scores" that the the lender can separately purchase from the providers. CFPB and others are confusing raw information with analytical information.

Maybe the broader question is one of financial literacy.  I have a feeling that a great majority of the "credit invisibles" and "unscoreables" don't understand (or don't care to understand) how the system works.
 

  After reading the article, I don't think the CFPB and others are confusing raw information with analytical information. Here's the CFPB announcement:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-tr...

the two primary allegations are:TransUnion, since at least July 2011, and Equifax, between July 2011 and March 2014, violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by:

  • Deceiving consumers about the value of the credit scores they sold: In their advertising, TransUnion and Equifax falsely represented that the credit scores they marketed and provided to consumers were the same scores lenders typically use to make credit decisions. In fact, the scores sold by TransUnion and Equifax were not typically used by lenders to make those decisions.


  • Deceiving consumers into enrolling in subscription programs: In their advertising, TransUnion and Equifax falsely claimed that their credit scores and credit-related products were free or, in the case of TransUnion, cost only “$1.” In reality, consumers who signed up received a free trial of seven or 30 days, after which they were automatically enrolled in a subscription program. Unless they cancelled during the trial period, consumers were charged a recurring fee – usually $16 or more per month. This billing structure, known as a “negative option,” was not clearly and conspicuously disclosed to consumers.


To me, that seems to be that the CFPB is going after TU and EFX because their marketing departments the ones that were confusing raw information with analytical information. It's not about the report and the information in the report. It's the score and that TU/EFX may have been selling their scores as scores typically used by others.

As for the "negative option". I suppose that's disputable. I know I went through the steps at one bureau to get the free trial and cancelled because I say language about the need to cancel membership during the trial period. May have been EXP since they're not party to this.
 

speedracer714 said:   
tuphat said:   Not defending the bait-and-switch tactics of these companies, but --

To say that the companies "prevented" consumers from "see[ing] accurate credit reports that reflect the information that lenders see when they assess them" is absurd.  The free annual credit reports available to everyone contain no less and no more information than what's available to lenders, with the exception of the algorithm-based "scores" that the the lender can separately purchase from the providers. CFPB and others are confusing raw information with analytical information.

Maybe the broader question is one of financial literacy.  I have a feeling that a great majority of the "credit invisibles" and "unscoreables" don't understand (or don't care to understand) how the system works.

  
The majority of the public go by the typical FICO score that's sold so to have your loan based on any other score is misleading and understandably upsetting when you find your interest rate is higher because the score on "their" reports show 50 points lower, whether that's true or not.  I know a lot of this BS is used in auto loans to strong arm the buyer into higher interest rates.

  
Even more fun, there are different flavors of FICO score - -weighed for different purposes + older versions of every flavor that are still used by some banks.  

The "score" is still based on the same information that is found on your basic report though.  It is just how they process it.

imbatman said:   
tuphat said:   Not defending the bait-and-switch tactics of these companies, but --

To say that the companies "prevented" consumers from "see[ing] accurate credit reports that reflect the information that lenders see when they assess them" is absurd.  The free annual credit reports available to everyone contain no less and no more information than what's available to lenders, with the exception of the algorithm-based "scores" that the the lender can separately purchase from the providers. CFPB and others are confusing raw information with analytical information.

Maybe the broader question is one of financial literacy.  I have a feeling that a great majority of the "credit invisibles" and "unscoreables" don't understand (or don't care to understand) how the system works.

  After reading the article, I don't think the CFPB and others are confusing raw information with analytical information. Here's the CFPB announcement:
https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-transunion-and-equifax-pay-deceiving-consumers-marketing-credit-scores-and-credit-products/

the two primary allegations are:TransUnion, since at least July 2011, and Equifax, between July 2011 and March 2014, violated the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act by:

  • Deceiving consumers about the value of the credit scores they sold: In their advertising, TransUnion and Equifax falsely represented that the credit scores they marketed and provided to consumers were the same scores lenders typically use to make credit decisions. In fact, the scores sold by TransUnion and Equifax were not typically used by lenders to make those decisions.


  • Deceiving consumers into enrolling in subscription programs: In their advertising, TransUnion and Equifax falsely claimed that their credit scores and credit-related products were free or, in the case of TransUnion, cost only “$1.” In reality, consumers who signed up received a free trial of seven or 30 days, after which they were automatically enrolled in a subscription program. Unless they cancelled during the trial period, consumers were charged a recurring fee – usually $16 or more per month. This billing structure, known as a “negative option,” was not clearly and conspicuously disclosed to consumers.


To me, that seems to be that the CFPB is going after TU and EFX because their marketing departments the ones that were confusing raw information with analytical information. It's not about the report and the information in the report. It's the score and that TU/EFX may have been selling their scores as scores typically used by others.

As for the "negative option". I suppose that's disputable. I know I went through the steps at one bureau to get the free trial and cancelled because I say language about the need to cancel membership during the trial period. May have been EXP since they're not party to this.

 I've never understood why people think it's so important to "know your score" anyways.  Review your full report, of course, but if all the info is accurate, your score is what it is, whether you know it or not.

It only matters if you're near a rate cutoff and landing an auto loan or mortgage. Reducing balances fur a month to 1% limit and only1 card can raise a score a lot.

If you're at 735, you can bump up to 740 prime mortgage rates and/or know to avoid inquiries. Or, if 800 you know that several new credit cards are fine even though you're also planning a mortgage refinance soon, etc.

And we are confident about those score factors through checking on scores and drawing conclusions on how the full report data has changed and how the score was or was not affected.

@imbatman --

Good points, my bad, the companies were selling scores. But:

The so-called "educational scores" were disclosed as such, along with warnings such as: "There are numerous credit score and models in the marketplace and lenders are likely to use a different score when evaluating your creditworthiness." CFPB complains that the disclaimers were not clear and conspicuous, e.g., they were "typically in fine print, at the bottom of the page."

I think it's debatable whether the advertising was deceptive, but you really can't debate w/ CFPB when it serves as judge, jury and executioner.

My my, the legal "want to be"s here. Obviously no one has ever read the pattern jury charges issued by the respective courts of appeals that apply here. I am willing to bet that none of you know which instructions are used. All that has to be proved is that the statement is a "half truth or effectively conceals or omits a material fact". Failure to disclose possible variations of scoring and leaving an impression that a JURY would conclude misrepresents the validity of the presented information and the purpose that it is used. Thar is why Fitch, Moody's and S&P all pled guilty in the credit evaluations out of the 2008 credit bubble. The mere existence of the other scores creates the rebuttable presumption that the credit agency engaged in less than full disclosure (aka half truth) satisfying the jury instruction.

Tuphat, you make an absolutely idiotic statement when you say CPFB is judge jury and hangman. Title 28 gives the credit agencies the right to remove agency enforcement proceedings to a court of record ie US District Court for the District of Columbia specifically and on payment of the jury fee, demand a jury. I have seen companies do that with nearly a 100% rate of remourse, the jury of your peers is not 100% WASP. Results are usually worse than dealing with the agency.

"Republicans and Democrats agree that the laws on the books must be enforced. Where we disagree is over whether unelected bureaucrats should have the power to write new laws. As currently structured, the CFPB has virtually unlimited power to do just that — and is harming consumers with higher costs and less access to financial products and services as it does.

"The changes we seek through the Financial CHOICE Act will truly make the CFPB the 'cop on the beat' its supporters claim they want. Cops don’t write the laws; they investigate and enforce the laws — and they don’t serve as cop on the beat, judge, jury and Congress all rolled into one."

http://financialservices.house.gov/blog/?postid=401778 

Finding that advertising is deceptive is writing a new law?

Glitch99 said:   
 I've never understood why people think it's so important to "know your score" anyways.  Review your full report, of course, but if all the info is accurate, your score is what it is, whether you know it or not.

If your score is close to a different bracket in type of borrower it puts you in, then it may be important to know your score, know what's the best way to improve it by a few point quickly to apply for a loan at a lower rate.

But even so, it's not so clear cut anyway. Some lenders will consider excellent credit score above 740, others above 760 so even knowing your score doesn't guarantee you'll get the best loan rate from a specific lender without additional information. And different lenders will use different bureaus that will calculate scores slightly differently from each other.

Before Credit Karma and all the free monitoring from various data breaches, I had looked into some of the paid products the credit bureaus had and certainly the free trial setup was offered. But it's hard for me to agree with how it was not well disclosed. When they ask for your credit card information while providing you with your free credit score, that should alert anyone that they'll be looking at getting paid at some point. Whether the 7-day or 30-day trial period was clearly explained, is a potential issue but I don't remember the whole offer being that confusing even when it was presented as an additional option while reviewing your free credit report.

duplicate

Tuphat the Financial CHOICE Act does not really accomplish what is suggested. That takes an amendment to the Administrative Procedures Act of 1948. That was settled by the US Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). I was around for that one as part of the API amicus panel. An Agency writes regulation that MUST comply with the statutory intent. If they do not then they are struck down. The real intent is to remove the Commissioner from the independent supervision of the Federal Reserve which is independent of the political office of the President. Justice Oliver Wendell Holmes held that structure to be constitutional despite what a district court said last year. tuphat you watch too much Faux News.

Shandril , the problem is that the FICO number the credit bureaus give you is NOT the number they give a lender. When I refinanced my home a year ago January, My mortgage processor had three FICO scores and I had three FICO scores. The average of the ones I got was 17 points higher than the average the mortgage company got and no two numbers were the same. That is the kind of deception the CPFB is after. Experian gave the mortgage company a score 5 points higher than what they provided me. Equifax was 29 points different for FICO scores issued the same day. Sent that back to them along with a copy of the envelope I received mine in. They "corrected" their score sent to the mortgage company.

This is the kind of CRIMINAL activity that the CPFB is trying to put a stop to. Tuphat do you really think Eqifax and Trans Union would rather be dealing with the Postal Inspectors and the Criminal Div of DOJ?

tuphat said:   @imbatman --

Good points, my bad, the companies were selling scores. But:

The so-called "educational scores" were disclosed as such, along with warnings such as: "There are numerous credit score and models in the marketplace and lenders are likely to use a different score when evaluating your creditworthiness." CFPB complains that the disclaimers were not clear and conspicuous, e.g., they were "typically in fine print, at the bottom of the page."

I think it's debatable whether the advertising was deceptive, but you really can't debate w/ CFPB when it serves as judge, jury and executioner.

  I wish consumers could always argue that fine print on the bottom of the page weren't enough to enforce terms.
 

@nsdp -- Perhaps you are not aware that the DC Circuit UPHELD the district court's finding that the CFPB is unconstitutionally structured.*  CFPB was successful in getting a en banc rehearing; oral arguments are scheduled for May 24.  I think the betting line favors an en banc result effectively same as panel decision, and maybe worse, depending on whether they find that the constitutional flaw can be remedied with a "simple" fix vs. wholesale standdown.  Stay tuned.

https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf
https://www.cadc.uscourts.gov/internet/opinions.nsf/5D0253C4E25B93FB852580C9005F3AE1/$file/15-1177-1661681.pdf

*  "In light of the consistent historical practice under which
independent agencies have been headed by multiple
commissioners or board members, and in light of the threat to
individual liberty posed by a single-Director independent
agency
, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore
hold that the CFPB is unconstitutionally structured."  Ciscuit court opinion at 9-10.  Emphasis added.

My money is on Oliver Wendell Holmes. The DC Circuit panel is 7-4 Democrats. I think who ever is making odds is smoking whacky tabacky. I have been there and argued cases before the 5th and the 10th. The DC Circuit avoided addressing the Chevron case issues completely. That was why en banc rehearing is mandatory. The current DC decision implies that the governing structure of the Federal Reserve Bank is unconstitutional. CPFB is not an independent agency but is funded (not subject to congressional appropriation but by the Board of Governors of the Federal Reserve. Your arguement means that the Chief US Marshal and the US Marshall in each district are unconstitutionally serving as well as the US Probation Office.

The fundamental problem is the Federal Reserve is neither fish (article I Legislative) nor fowl (Article II executive), something the judges forgot from Justice Holmes' ruling is the predicate for Humphrey's Executor and also ignores the War Production Board and the Office of Price Control, War Mobilization Board had a single voting director with far greater powers. The WPB did include the Secretary of War, the Navy, Agriculture and others ex officio. Order M-9-C restricted copper, OPA rationed tires starting the 11th of December 1941, gasoline shortly thereafter. The court seems to have forgotten the incarceration of Sewell Avery chairman of Montgomery Wards for violations of orders from the National War Labor Board. The long history from the Fugitive Slave Act forward to today weighs significantly against the three judge panel. Also En Banc hearings reverse panels 78% of the time in the DC Circuit.

tuphat said:   @nsdp -- Perhaps you are not aware that the DC Circuit UPHELD the district court's finding that the CFPB is unconstitutionally structured.*  CFPB was successful in getting a en banc rehearing; oral arguments are scheduled for May 24.  I think the betting line favors an en banc result effectively same as panel decision, and maybe worse, depending on whether they find that the constitutional flaw can be remedied with a "simple" fix vs. wholesale standdown.  Stay tuned.

https://www.cadc.uscourts.gov/internet/opinions.nsf/AAC6BFFC4C42614C852580490053C38B/$file/15-1177-1640101.pdf 
https://www.cadc.uscourts.gov/internet/opinions.nsf/5D0253C4E25B93FB852580C9005F3AE1/$file/15-1177-1661681.pdf 

*  "In light of the consistent historical practice under which
independent agencies have been headed by multiple
commissioners or board members, and in light of the threat to
individual liberty posed by a single-Director independent
agency
, we conclude that Humphrey’s Executor cannot be
stretched to cover this novel agency structure. We therefore
hold that the CFPB is unconstitutionally structured."  Ciscuit court opinion at 9-10.  Emphasis added.

  Don't bother arguing with him.  You'll just get rambling commentaries with little or nothing to do with the topic at hand.  

Cestmoi the standard is that a court decides on the narrowest basis possible. Here an erroneous interpretation of the statute of limitations.
Although one member of the panel (Judge Henderson) argued in a dissent that it was not necessary to
reach the constitutional issues regarding the CFPB’s structure because the CFPB’s order had been
vacated on statutory grounds, the majority of the panel (Judges Kavanaugh and Randolph) concluded
that “[t]he constitutional issue cannot be avoided in any principled way.” Kavanaugh and Randolph over stepped their authority by deciding a question not necessary to decide the case. That is the "narrowest grounds basis" which I leave for your research. The standard is that you do not decide constitutional arguments when the case can be decided in a statutory basis. Aswander vs TVA https://en.wikipedia.org/wiki/Constitutional_avoidance

Judges Kavanaugh and Randolph have seen fit to overrule Justice Brandeis's opinion in Aswander. A BRIDGE TOO FAR for a Court of Appeals to overturn the Supreme Court.

nsdp said:   Although one member of the panel (Judge Henderson) argued in a dissent that it was not necessary to reach the constitutional issues regarding the CFPB’s structure because the CFPB’s order had been vacated on statutory grounds, the majority of the panel (Judges Kavanaugh and Randolph) concluded
that “[t]he constitutional issue cannot be avoided in any principled way.” 

  Congratulations, you're capable of cutting and pasting the commentary of others, without providing due credit.  It was obvious you'd stolen this section, since it was coherently written. 

https://buckleysandler.com/uploads/1082/doc/Special_Alert_-_PHH_...



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017