Credit bureau Experian accused of fraud in California lawsuit

Friday, April 8th, 2011 By

Court

Experian is being sued for fraud; customers say the company doesn't provide relevant information in the credit reports it provides to customers. Photo Credit: Swampyank/Wikimedia Commons/CC-BY-SA

A lawsuit has been brought against credit bureau Experian in California. Experian is one of the three main credit bureaus, along with TransUnion and Equifax, and credit ratings from those bureaus are used in creating a persons’ credit score. The plaintiffs in the suit, which may become class action, are alleging fraud.

Plaintiffs say free credit report sites give false info to consumers

Plaintiffs in the California lawsuit against credit bureau Experian are saying the bureau has defrauded. They say Experian provides misleading information on the websites where the company sells copies of credit reports, according to MSNBC. The suit claims that Experian provides the wrong score, purposefully, through FreeCreditScore.com and FreeCreditReport.com. The sites, which charge a $14.95 per month fee to users so they can monitor their credit report activity, provide the Experian PLUS score. The reason why the plaintiffs are seeking a class action status is because that isn’t the score lenders would look at if a person applied for a personal loan.

Lenders look at FICO scores

When lenders or other parties check a person’s credit score, they aren’t looking at a score that one credit bureau comes up with. Lenders look at the FICO score, or the number from the credit scoring system developed by Fair Isaac and Company. Fair Isaac scores are calculated by looking at certain data about a person and coming up with a numerical rating of that persons’ credit worthiness. Experian, Equifax and TransUnion all produce credit scores with the FICO formula, and those scores are reported to lenders. The lawsuit accuses Experian of fraud because the PLUS score is not reported to anyone and would not be considered if someone applied for a job or installment loan. The suit says Experian misled consumers by advertising worthless information for sale. Experian had to be compelled by threat of a Federal Trade Commission suit to advertise the link to the government site where consumers can request the one free report from each bureau that people are allowed by law.

States trying to get employers to mind their own business

Labor rights advocates have never been enthralled with the idea of employers checking the credit scores of potential new hires. At least half of the United States isn’t either; 49 bills in 25 states are currently before state legislatures to legally bar employers from checking credit scores of a potential new hires. Though credit bureaus that sell the reports to businesses and some businesses contend that it can catch a potential problem employee, civil rights and labor advocates insist that it is prying into an area that no employer has a right to.

Sources

MSNBC

USA Today

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This post has one comment

  1. Ryan Joseph says:

    This is what happened to me and I never, I said NEVER requested a credit report from any of these companies.

    They also charged my account 3 times in the same month using the number of my new Check Card (got it 3 weeks ago), I just contacted my bank and requested a New Card and of course cancelled all these unauthorized transactions. I am not sure how they got my card information… but I got 2 unauthorized transactions from CREDITSCORE.com and 1 from FREECREDITSCORE.COM in the same month…

    My bank said that they had many similar cases this month and these folks use others websites as well. They are having the same problems here, in the UK and many other places. They usually charge $14.95 and in most of the cases you never requested it.

    All I know is that I will prosecute Them tomorrow!!!

    P.S.
    I just checked the whois database for both domains and they all show the same info, summarizing, same owners:

    Consumerinfo.com, Inc. – DNSAdmin@consumerinfo.com
    18500 Von Karman
    Irvine, CA 92612
    Phone: 800 3570821

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