Credit Bureau Nailed with $60 Million Verdict for FCRA Violations

TransUnion, one of the three main credit reporting agencies (CRAs) for administering most consumer credit information, lost a class action lawsuit recently for violations of the Fair Credit Reporting Act with a final verdict against the credit bureau totalling $60 million. The lawsuit stemmed from the CRA’s refusal to alert certain consumers of their rights when consumers shared the same name as someone on the Department of the Treasury’s Office of Asset Control list, a collection of suspected drug kingpins and terrorists.

In the original complaint, a member of the class claimed that he was denied a car loan when a TransUnion credit check returned a hit on the Dept. of the Treasury’s druglord database. TransUnion refused when the consumer asked for a copy of his credit report with notation of the Treasury flag and a summary of his rights.

This is not the first time TransUnion has been reprimanded in court for its failure to disclose that a consumer was on the Dept. of the Treasury’s list. The Consumer Financial Protection Bureau has made the accuracy of credit data and the reporting process a priority. The Bureau is currently considering a new rule that would allow alternative sources of data to help factor credit scores.