Agency: Federal Trade Commission (FTC)Washington
Description:
On January 13, 2022, Dun & Bradstreet (D&B) entered into a Consent Order with the Federal Trade Commission over allegations that it engaged in deceptive and unfair practices in regards to the CreditBuilder products sold to small and mid-sized businessesAllegations include deceiving companies about the purported benefits of its CreditBuilder line of products; used deceptive automatic renewal practices, including transferring customers into a much more expensive tier of service without clear notice; and reported inaccurate information on businesses’ credit reports without providing a reasonable process for fixing errors. Under the proposed order D&B has agreed to make substantial changes to their operations and provide refunds to certain businesses that purchased the company’s products in belief that they would improve their business credit scores and ratings.
The complaint alleges D&B used deceptive claims to promote its products including promising that small businesses could easily add payment experience information to their reports. When a business spotted inaccurate or incomplete payment information in its D&B report and turned to D&B, they responded by pitching its CreditBuilder line of services, including what D&B described as “credit-on-self” products, which supposedly allowed small businesses to add their payment history information to their own credit reports. The FTC also says D&B pitched CreditBuilder to new businesses by falsely claiming that the business had to buy the product so D&B could conduct a background check and get the company a completed D&B credit report.
In addition, the lawsuit alleges D&B mislead consumers with deceptive claims and practices related to automatic renewals telling some customers that at the end of their subscription term, their service would be automatically renewed and they would be charged at the “then current price.” D&B didn’t disclose that this could result in hefty price increases. Customers who signed up for a $499 annual subscription could end up being charged $1,599 per year for a different product, without adequate notice of the change. And D&B would charge the “then current price” only if it was financially advantageous to D&B. If the price went up, customers were billed the higher price. If the price went down, customers were charged the previous – higher – price.
The complaint also charges that D&B’s practice of reporting incorrect information on affected businesses’ D&B credit reports without providing a reasonable means for them to dispute the misinformation is an unfair trade practice and violation of the FTC Act.
The proposed settlement will require D&B to implement procedures that will allow all businesses a way to challenge inaccurate information on their D&B credit reports. Under the terms of the order, D&B must investigate complaints about inaccurate reports either by deleting the disputed information or by conducting a reinvestigation that includes considering information the business submits in support of its dispute. The reinvestigation also has to be completed within a specified number of days, depending on the type of information the business is disputing. If the reinvestigation finds that the disputed information is inaccurate, D&B must correct it within a specified timeframe – which for many of its products, means within just a few days. If D&B can’t verify the payment information it’s reporting, it must delete the information and take steps to see that it doesn’t show up later on the business’s report.
D&B must also make up-front disclosures about the nature of its services. The proposed order also puts restrictions on D&B’s ability to automatically renew CreditBuilder subscriptions, including a prohibition on D&B using automatic renewal to switch a subscriber into a different product or to charge a higher price for the same product without giving clear and detailed notice of the increase and information in advance on how to cancel.
The settlement also requires D&B to provide refunds to many businesses that first bought CreditBuilder products between April 2015 and May 2020 and to give many current customers the opportunity to cancel their subscriptions and get refunds.
For detailed information visit the FTC’s website for the complete complaint and agreement.
Date of Action: 1/13/2022