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Did TransUnion’s Website Mislead Consumers?

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If You Buy Online - Read This

Washington, DCA small but significant court case is shedding light on the issue of consumer rights in the burgeoning world of online sales and, secondly, bringing TransUnion’s “credit score” marketing and sales strategy into question.

Gary Sgouros, a diligent consumer who wanted to see what was on his credit report, claims in a class-action lawsuit that he, and others, were cheated by TransUnion in terms of the product they were sold, and then suckered into agreeing to the company’s standard arbitration clause that preempts their right to sue if they found the TransUnion product to be unsatisfactory.

Credit reports are free

By law every American has the right to obtain a free “credit report” from TransUnion, Experian or Equifax. TransUnion offered Sgouros and others a more complete reading of their credit when they purchased a $39.99 “credit score” from them.

“They are selling a product that does not have any real value,” says F. Paul Bland, an attorney and Executive Director of Public Justice, a consumer and justice advocacy organization in Washington, D.C. “The credit score they are selling you is not used by anyone. It’s your Fair Isaac or FICO score that determines whether you pay more for your mortgage or a car loan. The TransUnion score is something they made up. It is not a meaningful gage.”

In Sgouros’s case, according to the court documents, he learned that the $39.99 credit score purchased from TransUnion was 100 points lower than the credit score TransUnion provided to a car dealership where he was buying a vehicle. TransUnion, again, according to the documents, uses one scoring model for lenders and a different model to generate the $39.99 scores.

The Fair Credit Reporting Act was amended several years ago making it possible for everyone to get a free credit report. What TransUnion has done, according to Bland, is find a way to monetize the request. “If you want to get your credit report from TransUnion or Equifax or Experian, you can get that for free if you go to the right place,” adds Bland.

No comment

LawyersandSettlements reached out to TransUnion for comment but received no reply.

Almost every online retailer, merchant and service provider requires that dissatisfied consumers submit to arbitration. (If they don’t click “I agree,” the transaction doesn’t proceed.) The arbitration process Bland says is often secretive, run by corporate defense lawyers and heavily weighted against the consumer.

Having said that, even the Supreme Court has repeatedly upheld and expressed confidence in the arbitration process. However, increasingly, when there is evidence that the consumer was “muddled” by the arbitration clause, courts rule in favor of the consumer.

“As an advocate I think the arbitration clauses are bad for the consumer. However, as a lawyer I know that you can’t make that argument,” says Bland. “The Supreme Court has made it clear that arbitration is preferred by federal law. Any state laws would be preempted. So the ongoing litigation around arbitration clauses is limited to situations where companies make mistakes in the arbitration clauses or essentially make a drafting error.”

Judge says website was confusing

After pouring over the TransUnion website, U.S. District Court Judge James Zagel ruled that, indeed, the website design led consumers to believe that they were agreeing to have their credit records checked when, in fact, consumers were agreeing to have complaints dealt with through arbitration. They were, in essence, clicking away their rights without being aware of what that click meant.

“I think Judge Zagel is right,” notes Bland.
“However, this is far from death for arbitration clauses. This just says if you are going to force people into arbitration you can’t confuse them, or muddle them; you can’t hide the ball.”


Now that Judge Zagel has tossed out TransUnion’s bid to have the case settled by arbitration, it seems more likely that Sgouros’s class action will have its day in court.

“In this case TransUnion did a terrible job of setting up the clause,” says Bland. “So I don’t think they are going to be able to walk away from the consumer protection laws.”

Now here’s something really important

The Consumer Financial Protection Bureau was asked to review the “arbitration clauses” related to financial lending institutions. The bureau has been reviewing these clauses for years now and it is widely expected that it will have something to say soon. It is possible that when it comes to lending institutions, the “arbitration clause” that pre-empts a consumer’s right to seek redress in courts may go away.

It will still apply in most other situations, but when it comes to lenders, there may be a change.

Legal Help

If you or a loved one have suffered losses in a similar case, please click the link below and your complaint will be sent to a consumer frauds lawyer who may evaluate your claim at no cost or obligation.

Reader Comments

Posted by

on
1st of all, Credit bureaus are sopose to have the best security on our info. We should not have to pay another company to secure our information from fraud. If these current credit bureau company cant do the job, then we need to think about firing them and getting one that can! Like life lock. Why are we paying or needing to pay for something we should already have secured. If we didnt sign up for trw trans union and cbi then who did?

Posted by

on
1st of all, Credit bureaus are sopose to have the best security on our info. We should not have to pay another company to secure our information from fraud. If these current credit bureau company cant do the job, then we need to think about firing them and getting one that can! Like life lock. Why are we paying or needing to pay for something we should already have secured. If we didnt sign up for trw trans union and cbi then who did?

Posted by

on
I am trying to buy my first home and My Fico according to Experian is 736 and transunion is 612 and Equifax is 632. WTH! How is this possible one has inaccurate information when is disputed but the two highest have the exact same credit reporting. This is insane. I am spending 200 hundred updating my credit but they get more inconsistent as I am so confused. How can anyone buy anything anymore. This is absolutely ridiculous and a major rip off.

Posted by

on
The same thing that happened to M. Gray (and many others) happened to me when I was younger.
I signed up for the $1 credit score and found out they had charged for the many months following (maybe around 9) of a subscription for credit monitoring. (why do i need that, I do that myself!Plus there are free sites that do that too.)it was several hundred dollars.
They also kept passing me around to other people on the phone, and had the nerve to keep trying to get me to keep this useless service and keep paying. They finally said they would refund some when I said I was going to try to organize a class action suit, but I needed to hound them to do it/ Still, they got a couple of hundred from me for something i never signed up for. Of course, I'm only a drop in this bucket of greed and deception. it's appalling how this company victimized people over and over with this scam. Important lesson for my younger self, there is no free lunch and there are vultures like Transunion.

Posted by

on
its BAD when you work all your life paying bills to companies like Comcast ,Entergy and other Companies and its never reported on your TransUnion ,Experian, Equifax Credit Report . These Companies give [ Credit History report ] So what happen to the Whole credit History . It only reports [ SOME OTHER COMPANIES BAD REPORTS ,COMPANIES THAT LIED TO GET PAID TWO TIMES AND COMPANIES THAT THE GOVERNMENT PAID LIKE DOCTORS AND OTHER SERVICES .

Posted by

on
Add my voice to the chorus of people misled by the "$1 Credit Score", and then discovered automatic drafts for a monthly subscription to which I NEVER agreed. I called immediately and they reversed the charge, and said my subscription was cancelled. Then they proceeded to continue the drafts the very next month. Their automated phone directory is a labyrinth of options, seemingly, none of which lead to an option to speak with a person. When I finally get through, it's just like all the other corporate THIEVES like telecoms, banks, other organizations that help themselves to your money: I tell the story to five or six different people who then transfer me to the next.
There seems no way to hold these vermin accountable, and who is to blame? The very people who are supposed to protect us from these shenanigans.

Posted by

on
I came across this article because I was working on suing Transunion for FCRA violations. I guess I'll add state consumer protection claims.

It's become standard business practice in the USA to make billions ripping off consumers and then force arbitration or settle to paralyze developing case law that could be advantageous for everyone getting ripped off.

Posted by

on
Transunion mislead me a few years ago, I believe it was on credit card for 6 months, I will have to check my records to make sure.

Posted by

on
I recently notice that there is about $17/ month on my credit card bill. I originally was attracted by Transunion's $1 credit score check. I could not think of where I see that there are additional charges. I found online that many people like me fall for this type misleading charges. What Can I do about this? Please help

Posted by

on
Transunion misleading me for last 10 years paid 39.00 I would like to be a part of the lawsuit class action because I'm a victim.

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