Consumer complaint received 2023-02-11 00:00:00
Product: Credit reporting, credit repair services, or other personal consumer reports — Credit reporting
Issue: Improper use of your report — Reporting company used your report improperly
Company: Experian Information Solutions Inc.
State: NC

Complaint narrative:
CFPB Takes Action Against XXXX XXXX XXXX for XXXX XXXX to Secure Loans for Consumers Without Their Authorization The Consumer Financial Protection Bureau ( CFPB ) took action against XXXX XXXX XXXX for enabling contractors and other merchants to take out loans on behalf of thousands of consumers who did not request or authorize them. The CFPB issued a consent order against XXXX requiring the company to refund or cancel up to {$9.00} XXXX in loans for customers harmed by its illegal conduct, pay a {$2.00} XXXX civil penalty, and implement new procedures to prevent future fraudulent loans. 
XXXX careless business and customer service practices enabled its merchants to take advantage of vulnerable consumers who needed financial help to repair their homes and to pay for other critical retail services by setting up loans without consumers consent, said CFPB Acting DirectoXXXX XXXX XXXX. For consumers to wind up in debt to XXXX for loans they never knew about is simply wrong. The CFPB will not stand for practices that allow conduct like this in the marketplace. 
XXXX, a non-bank institution headquartered in XXXX, used merchants, primarily those providing home improvements, to promote and offer financing to customers before making on-the-spot lending decisions based on criteria provided by its partner banks. Proceeds from XXXX loans, ranging from a few XXXX to tens of thousands of dollars, bypass consumers and are disbursed directly to merchants following the merchants application for payment. Some consumers complained that they never applied for a loan or even heard of XXXX before receiving billing statements, collection letters, and calls from the company. 
Processing and Enabling Unauthorized Loans The CFPB found that XXXX engaged in unfair practices against their customers in violation of the Consumer Financial Protection Act of XXXX ( CFPA ). The violations involved the companys loan origination and servicing activities, which included : Processing and servicing unauthorized loans : XXXX serviced and facilitated the origination of loans to consumers who did not request or authorize them. Between XXXX and XXXX, XXXX received at least XXXX complaints from consumers who stated they did not authorize submission of a loan application. The companys complaint investigations found that in at least XXXX instances its merchants were at fault. 
Structuring the XXXX XXXX in a manner that enabled unauthorized loans : XXXX failed to create and implement appropriate and effective controls during the loan application, approval, and funding processes, failed to implement adequate merchant training and oversight, and neglected to effectively manage consumer complaints. 
Enforcement Action Under the CFPA, the CFPB has the authority to take action against institutions violating federal consumer financial laws, including by engaging in unfair, deceptive, or abusive acts or practices. The consent order issued today requires XXXX to : Refund and cancel loans for harmed consumers : XXXX will provide up to {$9.00} XXXX in cash refunds and loan cancellations. 
Pay a civil penalty : XXXX will pay {$2.00} XXXX to the CFPB, which will be deposited into the XXXX Civil Penalty Fund Prevent future abuses : XXXX is required to prevent future illegal practices by verifying consumers identities and confirming their authorizations prior to activating loans or disbursing loan proceeds. XXXX must also implement an effective consumer complaint management program, exercise effective oversight of third-party merchant partners, and implement consistent standards to govern the write-off of illegal loans.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation