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Credit Reporting Agencies: Digital Dark Patterns

Digital Dark Patterns used in websites

Credit Reporting Agencies: Digital Dark Patterns

The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against one of the largest credit reporting agencies in the United States. The CFPB alleges that Transunion used digital dark patterns – design and user interface elements created to manipulate users into taking a desired action – to lure consumers into enrolling in its services.

As part of the 2017 settlement around deceptive marketing practices, TransUnion agreed to pay $13.9 million in restitution to victims and another $3 million in civil penalties, the CFPB said.

According to NPR, the company also agreed, in a binding law enforcement order, to take other actions regarding how it interacts with customers, such as obtaining informed consent for certain recurring payments and giving people an easy way to cancel subscription services.

“TransUnion is an out-of-control repeat offender that believes it is above the law,” said CFPB Director Rohit Chopra. “I am concerned that TransUnion’s leadership is either unwilling or incapable of operating its businesses lawfully.”

While the credit reporting agency has denied the allegations, saying that it complies with the law and does not use digital dark patterns to trick consumers, other advocacy groups have spoken out against Transunion on it’s business practices.

“Federal regulators, state Attorneys General, consumer advocates, and private attorneys have been battling a culture of impunity and arrogance by the credit bureaus for decades,” said Chi Chi Wu, a staff attorney at the National Consumer Law Center, in a statement about the lawsuit. She continued on to say that “Unfortunately, it’s the American consumer who ultimately pays the price for the credit bureaus’ long standing habit of flouting the law.”

In late 2021, the Federal Trade Commission issued a policy statement and warning against the use of illegal dark patterns. This put all companies using such marketing on full notice that their sign-ups must be clear, consensual, and easy to cancel. The use of dark patterns is a violation of law and the FTC says that it will continue to crack down on companies that engage in this deceptive trade practice.

What Are Digital Dark Patterns?

A digital dark pattern is a user interface design that is intended to deceive or mislead users into taking an action that they would not otherwise take, such as buying a product or signing up for a subscription service. Dark patterns are often used in online advertising and marketing, and have been criticized for being unethical and manipulative. An example of a dark pattern is a fake “cancel” button that takes the user to a page that upsells them on a more expensive product.

How to Avoid Dark Patterns

Learning how to spot the irregular, intrusive, or a misleading design on a website can protect you from being deceived by digital dark patterns. Here are a few things you can do to avoid digital dark patterns:

  • Be careful of online ads that try to trick you into clicking on them.
  • Read the terms and conditions carefully before you buy or sign up for anything.
  • Look for customer reviews before you buy anything.
  • Beware of websites that have a lot of pop-ups or are difficult to navigate.
  • Be cautious of any website that asks for personal information before you can even see what they are offering.

Consumers Are Easy Targets

The use of digital dark patterns is a violation of the Fair Credit Reporting Act (FCRA), which prohibits deceptive practices in the marketing of credit products and services by credit reporting agencies. These practices can have serious financial consequences for consumers. In some cases, it can lead to people paying for products that they may never use, cancel a service or get help from customer service. In the case of Transunion, the use of digital dark patterns may have led to people paying for a credit monitoring service that they did not want or need.

Andy Spears Consumer Advocate
Andy Spears – Consumer Advocate

Andy Spears is a Consumer Advocate who covers consumer protection issues on his blog and on social media. Spears says, “The bottom line is consumers don’t really need credit monitoring. Everything a credit monitoring “service” provides you can do for free on your own. Unfortunately, credit agencies use deceptive tactics to entice people to sign up for these unwanted, unneeded services. The best course of action is to steer clear of offers for additional products and services that provide no clear benefit to you.”

As the credit reporting industry comes under increased scrutiny, it’s important for consumers to understand their rights under the law. The Fair Credit Reporting Act (FCRA) provides consumers with certain protections, including the right to know what’s in their credit report, the right to dispute inaccurate information, and the right to opt out of marketing solicitations.

If you have been the victim of deceptive marketing by a CRA, you may be entitled to compensation.
You should contact an attorney as well as file a complaint with the FTC or your state AG’s office.

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Led by attorneys Michael D. Finn and J. Andrew Meyer with over 75 years experience, the Finn Law Group is a Consumer Protection Firm that Specializes in Consumer Law including the Fair Credit Reporting Act and Timeshare related issues. Contact Us for a Free Consultation today.

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