Lawsuit: Credit score sites mislead consumers

A new lawsuit filed in California claims that “Experian is intentionally confusing customers, engaging in false advertising and not giving consumers what they pay for when they sign up for services at the [ ] popular and Website.”

David Woodward, the attorney who filed the case, is calling it a “classic consumer fraud case.”  Why “consumer fraud”?  According to Woodward, Experian advertises to consumers that having access to their credit scores will “benefit” and is “essential before borrowing money[;]” however, the scores which Experian presents to its customers are not the scores actually used by the majority of lenders.  The scores Experian sells to consumers are known as PLUS scores, whereas the scores used by lenders are FICO scores.  The difference between the two scores remains unclear, but attorney Woodward states it is “immaterial[,]” his issue is with “intentionally” misrepresenting the “distinction in [ ] advertisements.”

Courthouse Steps and Pillars

Although Woodward may state the difference between PLUS scores and FICO scores is immaterial, it is an essential part of determining whether consumer fraud is present.  We must keep in mind that marketing will be marketing; advertisements will be advertisements, and inherent to the word advertisement is “calling attention to one’s product [or] service[.]” (Merriam-Webster Dictionary).  Granted advertisements are not to be misleading, but how can you really determine whether an advertisement is misleading without first looking at whether there is a difference between the scores, if any.  Today, companies know the ins and outs of advertising, they know just how far they can go without getting sued over an advertisement and they can get away with some misrepresentation.  A product that one claims does not work for them may work for others—and that’s why advertisements survive and are determined not to be false.

Experian has been in the hot seat before, just this past year the FTC required that Experian disclose to consumers that they could obtain credit reports for free from a congressionally-mandated website.  After that, Experian changed its focus to selling updated credit scores.

Where does that leave us today?  Until 2009 consumers were able to buy their FICO scores, but Experian then disallowed that score to be sold.  Today, “there is no way for consumers to obtain this number[.]” Will this suit force Experian to disclose FICO scores, or will it just mean that there advertisement materials will have to disclose the type and difference between the credit scores being reported?

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