Equifax, Transuion misled consumers, protection bureau says

Two of the nation's largest credit reporting bureaus, TransUnion and Equifax, will pay more than $23 million in fines and refunds to settle charges from a federal consumer watchdog that they misled consumers about the pricing and value of credit products.

The Consumer Financial Protection Bureau said Tuesday that the companies deceived consumers by suggesting that the credit scores they provided were the same scores used by financial companies to make lending decisions when, in fact, the scores 'were not typically used by lenders.”

The bureaus also were unclear about the price structure of some products, marketing them as being free or costing $1, when consumers actually were being enrolled in subscriptions that cost $16 a month.

'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.

Equifax and TransUnion will pay $17.6 million combined in restitution for consumers and $5.5 million in fines to the CFPB. The companies will need to notify affected customers about the refunds.

Credit scores can play an important role in consumers' financial lives, affecting the rates they earn on loans and their ability to obtain credit. But financial companies often use a variety of credit scores when making lending decisions, at times tailoring the score to the type of loan.