Class Action Lawsuit Filed Against Consumerinfo.com, an Experian Company

On March 23, 2011 a class action lawsuit was filed against Consumerinfo.com in Federal court in the Southern District of California.  The complaint, 11CV0569 DMS BLM, was filed on behalf of David Waring, a consumer who lives in San Diego.  The Plaintiff alleges that he went to the website freecreditreport.com and purchased a credit score from that site.  He was then allegedly enrolled in a credit monitoring subscription plan.

The law firms representing Mr. Waring is Stueve, Siegel, Hanson, LLP and Heins, Mills and Olson, PLC.  The firms are seeking class action status against Consumerinfo.com, which is an Experian company that also operates freecreditreport.com and freecreditscore.com.  You’re probably very familiar with these websites as they spend an enormous amount of money on their television advertising using bands singing about why you should “check your credit score.”  You also can’t go to the Yahoo home page without seeing an advertisement for your free credit score, offered by a Consumerinfo/Experian company.  Consumerinfo/Experian also operates creditreport.com, creditscore.com, and mycreditscore.com thus dominating common Google search phrases for credit reporting and credit scoring products and services.

The suit alleges that Consumerinfo “takes money from consumers through deception” and that it “does not sell what it advertises” and finally that they advertisements are “false, misleading and deceptive.”  I have to be honest, when I started reading the complaint I thought I was going to see an allegation that Consumerinfo’s websites were advertising something free when it’s really conditionally free, contingent on the consumer signing up for a trial period for a credit monitoring subscription.  However, that’s not the case.  The complaint is more targeted at how the Consumerinfo companies tacitly claim that the credit scores they provide are important to how lenders evaluate you, which they are not.

The score sold by the Consumerinfo sites is the Experian PLUS score.  That particular score is what’s referred to as a “marketing score.”  It is not used by lenders and isn’t commercially available to lenders, thus calling into question its value to the consumers who claim it as part of their trial credit monitoring subscription.  Experian admits that the scores aren’t used by lenders on their website, “The PLUS Score is not currently sold to lenders, and is not an endorsement or guarantee of your credit worthiness as seen by lenders.  The PLUS Score is not a so-called FICO score, and may differ for a variety of reasons.”  The Plaintiff states in his complaint that Consumerinfo/Experian fails to clearly and conspicuously disclose the fact that their score is not sold to lenders to determine creditworthiness.

Consumerinfo has had legal troubles in the past.  The Federal Trade Commission, in 2005 and in 2007, took action against the company for “unfair and deceptive trade practices.”  Consumerinfo paid over $1.25 million in fines and agreed to be more clear and conspicuous in their advertising offers where claiming a free credit report could result in enrollment in a credit monitoring program trial.

The Plaintiff is seeking class action status, disgorgement of Consumerinfo of money unjustly received, restitution to the Plaintiff and members of the class, and attorney’s fees.

John Ulzheimer is the President of Consumer Education at SmartCredit.com, the credit blogger for Mint.com, and a Contributor for the National Foundation for Credit Counseling.  He is an expert on credit reporting, credit scoring and identity theft. Formerly of FICO, Equifax and Credit.com, John is the only recognized credit expert who actually comes from the credit industry.  Follow him on Twitter here.

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