Whether it’s a football game, a standardized test, or a person’s credit, scores matter. In the case of consumer credit scores, the difference between falling in the high and low ends of the score spectrum impacts the financial lives of individuals. Understandably, many seek out their credit scores so that they know where they fall along that spectrum. Well-known credit reporting agency Experian marketed a service that provided just that: consumer access to credit scores used by lenders in making their credit decisions. According to a March 23, 2017, consent order (which also outlined a separate Experian violation) announced by the Consumer Finance Protection Bureau (CFPB), however, the scores provided by Experian were not what Experian represented them to be.
From 2012 to 2014, Experian marketed access to credit scores by, according to one representative advertisement, inviting consumers to “see the same type of information lenders see when assessing your credit.” Once individuals accepted the invitation, though, they did not see the actual score that lenders used. Instead, Experian provided them a different “educational” score. In actuality, lenders rarely used the educational score when making credit decisions. As a result, the CFPB found that Experian used misleading and deceptive practices in marketing access to the credit scores, in violation of the Consumer Financial Protection Act.
Importantly, the CFPB found a violation despite the fact that (1) Experian did not explicitly state that the scores it offered were the same ones used by lenders, and (2) Experian included a disclosure that the score it provided was “for educational purposes and is not the same score used by lenders.” According to the CFPB, in many instances, the disclosure was not appropriately conspicuous or close to the representations.
In light of the consent order, others in the marketplace offering access to credit scores should review the representations they are making when advertising their products. At least in the eyes of the CFPB, educational scores are not the same as those scores used by lenders, and it would be unwise to equate the two in marketing materials. A misleading representation about a product’s significance may still be misleading even if accompanied by a disclosure, especially those that are inconspicuous. The CFPB’s action makes clear that, in any event, it will continue to keep score of how access to credit scores is marketed.