Equifax and TransUnion Credit Report Buyers May Get Refund

TransUnion credit report

If you paid for an Equifax or TransUnion credit report in the past six years, you might be entitled to a refund, according to the Consumer Financial Protection Bureau (CFPB).

Earlier this month, the government watchdog claimed these two credit bureaus exaggerated the utility of their credit information. They also used misleading advertising.

Here’s where the CFPB says TransUnion and Equifax crossed the line — and how you can find out if you’re owed a refund.

Overstated usefulness of credit scores

As two of three major credit bureaus, TransUnion and Equifax collect information on consumers’ credit habits. Both track consumers’ credit accounts, loans, and history of repaying debts owed in a responsible manner.

In addition to credit reports, TransUnion and Equifax also sell credit scores. A credit score is a three-digit number that provides a snapshot of a consumer’s borrowing track record and creditworthiness. Many lenders will factor a credit score into their decision to approve or deny a loan or credit product.

However, consumers might not know that they have several credit scores. Lenders use FICO credit scores most often (90 percent of the time) to assess borrower’s creditworthiness.

But TransUnion provides its customers with credit scores using the VantageScore model, while Equifax uses its own internal scoring system. Yet both “falsely represented that the credit scores they marketed and provided to consumers were the same scores lenders typically use to make credit decisions,” the CFPB reports.

“Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them,” CFPB Director Richard Cordray said in a statement.

Tricked consumers into purchasing subscriptions

The two credit bureaus also employed deceitful language that hid the costs of subscription services. Consumers would sign up to get credit products that were advertised as free or just $1.

However, these products weren’t actually free. There was a short seven-day or 30-day trial during which the product as free or just $1. At the end of this period, customers were rolled into a subscription program that charged them a recurring monthly fee of $16.

To avoid these costs, customers would need to opt out of the service before the trial period ended. However, “this billing structure, known as ‘negative option,’ was not clearly and conspicuously disclosed to consumers,” according to the CFPB.

Essentially, consumers might not have realized they had enrolled in a subscription. And would be subsequently surprised with a charge each month.

Will you get a refund if you bought an Equifax or TransUnion credit report?

The CFPB ordered both credit bureaus to make several changes to their advertising. These should make costs clearer and services more transparent for users.

They are also required to provide monetary restitution totally $17.6 million to affected customers. The CFPB ordered TransUnion to pay $13.9 million to its affected consumers, and $3.8 million in payouts from Equifax.

If you were a customer of TransUnion between July 2011 and January 2017, you might be among the affected customers. Equifax’s affected customers would have paid for its services between July 2011 and March 2014.

If you suspect you were affected, however, you don’t need to take any further actions. The CFPB is requiring TransUnion and Equifax to identify affected customers and send letters notifying them of restitution.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with Citizens Bank at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, Citizens Bank checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
5.29% - 14.24%1$5,000 - $100,000Visit SoFi
8.00% - 25.00%$5,000 - $35,000Visit Payoff
5.99% - 16.24%2$5,000 - $50,000Visit Citizens
5.99% - 35.89%$1,000 - $40,000Visit LendingClub
5.25% - 14.24%$2,000 - $50,000Visit Earnest
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