CFPB hits another company with hefty fine for violations of the FCRA

Clarity Services, Inc., a Florida-based credit reporting agency, agreed to pay an $8 million penalty to the Consumer Financial Protection Bureau amid allegations that the company obtained credit reports on consumers without “permissible purpose.”

Under the Fair Credit Reporting Act, access to consumer credit reports is only permitted for a “permissible purpose,” such as the use of the information for employment purposes. Clarity, who compiles consumer credit reports from third-party consumer credit reporting agencies and sells them to financial services providers, violated this clause of the FCRA when, beginning in July 2011, it began requesting consumer reports for use in the company’s marketing presentations to demonstrate the value of their reports to potential clients.

In one instance, Clarity obtained nearly 190,000 unrequested consumer credit reports from credit reporting agencies for inclusion in a presentation for a prospective client, according to the CFPB Consent Order. The inquiries made by Clarity resulted in consumers’ credit files incorrectly reflecting a permissible inquiry by a lender.

Additionally, the CFPB claims that Clarity violated the FCRA further when it refused to investigate consumer disputes, including those related to credit inquiries, even though the company was aware that information in Clarity’s consumer files was “provided by or generated by unreliable sources, including inaccurate data from furnishers,” according to the Consent Order.

The full text of the CFPB Consent Order can be found here.

Previously, the CFPB had fined two background screening firms $13 million for their failure to take basic steps to provide accurate background screening reports on job applicants. More about that case can be found here.

Source: Consumer Financial Protection Bureau, 12/3/2015

Thank you for your interest in Business Information Group. We have received your message and will contact you in one business day or less.
You have exceeded the number of attempts to submit this form. As a result, your IP address has been temporarily blocked.

Get In Touch

Send a Message *fields required

What are your Interests?optional

Contact Information

Even our RFP PROCESS is state-of-the-art.

Take a look

What our clients are saying

We cannot express enough how much we have enjoyed working with BIG! It has really benefitted our processing and ease of doing business!

Licensing and Registration Manager
Investment and Insurance Company

I enjoy collaborating with BIG, and know that if I have to reach out with a question/concern, a positive attitude with a willingness to find resolve is on the other side of an email or a phone call.

Human Resources Administrator
Global Financial Services Firm

You have been the most professional and most helpful business partner that I have ever been associated with — always there to assist us and with rapid turnaround times.

Principal Consultant
Major Professional Services Network

I am confident whenever we add a product with your company that I will have a good experience.

Division Manager
Insurance and Financial Services Agency

We have received superior service and we know this is what you and your team strive for. We are grateful for the dedication, level of professionalism and effort shown.

Large Insurance Agency

You are leaving

Ok, Continue Cancel