Credit reporting agency TransUnion agreed to pay $23 million total across settlements with the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) for alleged tenant screening and security freeze deficiencies.
As part of a settlement with both agencies, TransUnion will pay $11 million to consumers and a $4 million fine for failing to ensure the accuracy of tenant screening reports, the CFPB and FTC announced Thursday. The agreement is subject to court approval.
The company reached a separate settlement with the CFPB requiring it to repay consumers $3 million and pay a $5 million penalty for failing to timely process security freeze and lock requests.
The details: TransUnion and its subsidiary TransUnion Rental Screening Solutions obtained eviction records from third-party providers without confirming the accuracy of the data provided, according to the CFPB and FTC’s complaint. The company violated the Fair Credit Reporting Act by not providing consumers with the names of its third-party data providers upon request, the agencies alleged.
The settlement requires TransUnion to implement practices and procedures to ensure the accuracy of eviction records and provide complete disclosures to consumers upon request.
In the second CFPB case, the agency found TransUnion had a backlog of nearly 40,000 unfulfilled consumer requests for security freezes and locks. The company addressed the backlog only after being informed by the CFPB of an upcoming exam, according to the agency.
The settlement requires TransUnion to identify and solve any issues in its technology contributing to the alleged issues, which dated back to at least 2003.
Compliance considerations: TransUnion has been subject to four enforcement actions brought by the CFPB in the last seven years. In April 2022, the agency blasted the company in a lawsuit alleging it violated a 2017 consent order for deceptively marketing credit scores and credit-related products.
Company response: Regarding the CFPB/FTC settlement, TransUnion said in an emailed statement it has worked with the agencies over the past year to enhance its screening reporting practices.
The company said it resolved the system issues identified by the CFPB in its separate action in 2020 and has processes in place to address any future problems.
“TransUnion agreed to these settlements to resolve these matters and proceed with our work providing important services and helping consumers reach their goals,” the company said.
TransUnion did not admit wrongdoing in reaching both settlements.