Equifax Inc. and Equifax Consumer Services LLC
Documents in this case
- Consent order · · 33 p.
- Stipulation · · 4 p.
Case summary
The Consumer Financial Protection Bureau (CFPB)
took action against Equifax, Inc. and its subsidiary for deceiving consumers
about the usefulness and actual cost of credit scores they sold to consumers,
and for luring consumers into costly recurring payments for credit products.
The CFPB ordered Equifax to truthfully represent the value of the credit scores
they provide, and the cost of obtaining those credit scores and other services.
Equifax must pay more than $3.8 million in restitution to consumers, and fines
totaling $2.5 million to the CFPB.
Consent order ()
PDF of this document (33 pages)
Page 2
UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU ADMINISTRATIVE PROCEEDING File No. 2017-CFPB-0001 In the Matter of:
CONSENT ORDER Equifax Inc. and Equifax Consumer Services LLC The Consumer Financial Protection Bureau (Bureau) has reviewed the marketing practices of Equifax Inc. and Equifax Consumer Services LLC (collectively, Equifax or Respondents, as defined below) and has identified the following law violations: (1) Equifax deceptively marketed credit scores to consumers by falsely representing, in violation of the Consumer Financial Protection Act of 2010 (CFPA), 12 U.S.C. §§ 5531, 5536, that the scores it marketed and sold to consumers were the same scores lenders typically use to determine creditworthiness; (2) Equifax deceptively marketed credit scores and credit-related products to consumers by falsely representing, in violation of the CFPA, that the scores and products were “free,” when, in reality, when a consumer signed up for a “free” trial, she was automatically enrolled in a subscription program for which she was charged a recurring monthly fee unless she cancelled; and (3) Equifax placed advertisements for its products on web pages that consumers accessed through AnnualCreditReport.com before they obtained their free annual file disclosures, in violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681-1681x, as 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 1 of 33
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implemented by Regulation V, 12 C.F.R. § 1022.136(g)(1). Under Sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563, 5565, the Bureau issues this Consent Order (Consent Order).
I Jurisdiction
The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the 1.
CFPA, 12 U.S.C. §§ 5563 and 5565, and section 621 of the FCRA, 15 U.S.C. § 1681s.
II Stipulation Respondents have executed a “Stipulation and Consent to the Issuance of a 2.
Consent Order,” dated December 22, 2016 (Stipulation), which is incorporated by reference and is accepted by the Bureau. By this Stipulation, Respondents have consented to the issuance of this Consent Order by the Bureau under sections 1053 and 1055 of the CFPA, 12 U.S.C. §§ 5563 and 5565, without admitting or denying any of the findings of fact or conclusions of law, except that Respondents admit the facts necessary to establish the Bureau’s jurisdiction over Respondents and the subject matter of this action.
III Definitions The following definitions apply to this Consent Order: 3.
a. “Affected Consumers” includes the following classes of consumers who were enrolled in a Negative Option free trial offer of an Equifax Credit-Related Product from July 21, 2011 through March 14, 2014: 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 2 of 33
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Consumers who enrolled in response to an advertisement run by i.
Equifax and cancelled from the Equifax Credit-Related Product within two billing periods (i.e., before the third bill) without receiving a refund of fees paid; and
Consumers who enrolled in response to an advertisement run by an ii.
Equifax Affiliate Marketer and cancelled from the Equifax Credit- Related Product within four billing periods (i.e., before the fifth bill) without receiving a refund of fees paid.
b. “Affiliate Marketer” means third-party entities that have marketed or advertised Equifax Credit-Related Products directly to consumers on Equifax’s behalf, as identified in the Compliance Plan. c. “Assistant Deputy for Consumer Reporting” means the Assistant Deputy for Consumer Reporting for the Office of Supervision for the Consumer Financial Protection Bureau, or his/her delegate.
d. “Board” means Equifax Inc.’s duly-elected and acting Board of Directors. e. “Clear and conspicuous” or “clearly and conspicuously” means “clearly and prominently” such that the required disclosure is difficult to miss (i.e., easily noticeable) and easily understandable by ordinary consumers, regardless of the method of communication, including in all the following ways:
In textual communications (e.g., printed publications or words i.
displayed on the screen of an electronic device), the disclosure must be of a type size and location sufficiently noticeable for an ordinary consumer to read and comprehend, in print that contrasts with the background on which it appears;
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In communications disseminated orally or through audible means ii.
(e.g., radio or streaming audio), the disclosure must be delivered in a volume, speed, and cadence sufficient for an ordinary consumer to hear and comprehend it;
In communications disseminated through video means (e.g., television iii.
or streaming video), the disclosure must be in writing in a form consistent with subsection (i), and must appear on the screen for a duration sufficient for an ordinary consumer to read and comprehend it;
In communications made through interactive media such as the iv.
Internet, online services, and software, the disclosure must be unavoidable and presented in a form consistent with subsection (i); a disclosure is not clear and conspicuous if a consumer must take any action, such as clicking on a hyperlink or hovering over an icon, to see it;
In communications that contain both audio and visual portions, the v.
disclosure must be presented simultaneously in both the audio and visual portions of the communication;
In all instances, the disclosure must be presented before the consumer vi.
incurs any financial obligation, and use diction and syntax that is understandable to a reasonable consumer, in each language in which the representation that requires the disclosure appears; and 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 4 of 33
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The disclosure must not be contradicted or mitigated by, or vii.
inconsistent with, anything else in the communication with the consumer.
f.
“Consumer Complaint” means any expression of dissatisfaction by a consumer.
g. “Effective Date” means the date on which the Consent Order is issued. h. “Enforcement Director” means the Assistant Director of the Office of Enforcement for the Consumer Financial Protection Bureau, or his/her delegate.
i.
“Equifax Credit-Related Product” means any product or service that includes an Equifax Credit Score that Respondents offer or have offered for sale directly to consumers, including through Equifax’s Affiliate Marketers. j.
“Nationwide Consumer Reporting Agency” refers to a “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis,” as that term is defined in section 603(p) of the FCRA, 15 U.S.C. § 1681a(p).
k. “Negative Option” means a category of commercial transactions in which a seller interprets a customer’s failure to take an affirmative action, either to reject an offer or cancel an agreement, as assent or continuing assent to be charged for goods or services.
l.
“Related Consumer Action” means a private action by or on behalf of one or more consumers or an enforcement action by another governmental agency brought against Respondents based on substantially the same facts as described in Section IV of this Consent Order. 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 5 of 33
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m. “Relevant Period” includes the period from July 21, 2011 through March 14, 2014.
n. “Respondents” means Equifax Inc. and Equifax Consumer Services LLC, and their successors and assigns.
IV Bureau Findings and Conclusions The Bureau finds the following:
Equifax Inc. is headquartered in Atlanta, Georgia, and compiles and maintains 4.
financial, consumer, and commercial data across the nation and worldwide. Equifax Inc. is the parent company of Equifax Consumer Services LLC.
Equifax Inc. is a “covered person” as that term is defined by the CFPA, 12 U.S.C. § 5.
5481(6).
Respondents market and sell credit reports to consumers and to commercial 6.
users including, but not limited to, lenders, insurance companies, and potential employers.
During the Relevant Period, Equifax marketed and sold Equifax Credit-Related 7.
Products to consumers. Consumers could purchase these products from Equifax in a one-time transaction or through a subscription where the consumer paid a recurring fee, usually monthly, to have continuous access to the product for as long as the consumer was enrolled in the subscription.
During the Relevant Period, Equifax marketed and sold Equifax Credit-Related 8.
Products to consumers through a variety of online channels, including banner and display advertisements that appeared on popular websites, direct emails to 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 6 of 33
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consumers, advertisements on Equifax’s own website (Equifax.com), and advertisements run by Equifax Affiliate Marketers. Findings and Conclusions as to Misrepresentations Relating to Credit Scores
Credit scores are numerical summaries designed to predict consumer payment 9.
behavior on a wide range of credit products. Many lenders and other commercial users rely on consumers’ credit scores when deciding whether to extend credit.
No single credit score or credit score model serves as the primary credit score for 10.
the marketplace. Lenders use a variety of credit scores, which vary by score provider, scoring model, and target industry.
The credit score models used most often by lenders are those developed by Fair 11.
Isaac Corporation (FICO), which has offered more than 60 different credit scoring models since 2011.
In addition to FICO credit scores, several companies have developed what are 12.
referred to as “educational credit scores” that are rarely used by lenders. As the name suggests, an “educational credit score” is intended for a consumer’s educational use.
Equifax developed its own proprietary credit score model, the “Equifax Credit 13.
Score,” which is also applied to information in consumer credit files in order to generate a three-digit credit score sold directly to consumers. Equifax also markets the “3-Bureau Equifax Credit Score,” which is generated by applying Equifax’s proprietary credit score model to the information in consumer credit files at each of the three largest Nationwide Consumer Reporting Agencies. For efficiency, this Order will refer to all credit score products marketed and sold by 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 7 of 33
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Equifax based on Equifax’s proprietary credit score model as the “Equifax Credit Score.”
The Equifax Credit Score is an “educational” credit score that is marketed to 14.
consumers and is rarely used by lenders.
Equifax’s Marketing of Its Credit Score to Consumers During the Relevant Period, in numerous instances, Equifax marketed the 15.
Equifax Credit Score to consumers by representing, directly or by implication, that the Equifax Credit Score available for purchase by consumers was the same score that lenders use to make credit decisions.
For example, one Equifax advertisement stated: “Your loan officer is reviewing 16.
your credit score. See your score.” Another advertisement stated: “Banks and lenders will most likely check your credit – make sure you see what they see and learn what that means for FREE.”
In fact, during the Relevant Period, the Equifax Credit Scores that consumers 17.
purchased from Equifax were educational scores that were rarely used by lenders to make credit decisions.
Equifax included disclaimers in some of its advertising for the Equifax Credit 18.
Score. For example, one disclaimer stated, “[t]his score is intended for your own educational use. There are numerous credit scores and models in the marketplace and lenders are likely to use a different score when evaluating your creditworthiness.” Another disclaimer stated that “[t]he Equifax credit score and 3-bureau credit scores are based on an Equifax credit score model and are not the same scores used by 3rd parties to assess your creditworthiness.” 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 8 of 33
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These disclaimers, however, were neither clear nor conspicuous. When such 19.
disclaimers were included, they were typically situated at the bottom of the advertisement in fine print, far removed from the claims the disclaimer was intended to modify.
In numerous instances, there were significant and meaningful differences 20.
between the Equifax Credit Scores that Equifax sold to consumers and the variety of credit scores used by lenders.
As a result, in these instances, the scores Equifax sold to consumers presented an 21.
inaccurate picture of how lenders, who used other scores and data providers, assessed consumer creditworthiness.
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or 22.
practices. 12 U.S.C. § 5536(a)(1)(B).
As described in Paragraphs 15 through 21, in connection with advertising, 23.
marketing, promoting, offering for sale, or sale of Equifax Credit-Related Products, in numerous instances Equifax represented, directly or indirectly, expressly or impliedly, that the credit scores it marketed and sold to consumers were the same scores typically used by lenders or other commercial users for credit decisions.
In fact, the credit scores Equifax marketed and sold to consumers were rarely the 24.
same scores used by lenders or other commercial users for credit decisions.
Thus, Equifax’s representations, as described in Paragraphs 15 and 16, were false 25.
or misleading and constituted deceptive acts or practices in violation of sections 1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B).
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Findings and Conclusions as to Misrepresentations Related to “Free” Credit-Related Products
During the Relevant Period, Equifax’s online advertisements also misrepresented 26.
to consumers that they could have access to “free” credit scores and credit score products.
Equifax’s advertisements contained offers such as: “Sign up today and get your 27.
FREE credit score”; “Get your 3 credit scores FREE”; and “Sign up today and get your FREE credit score.”
In fact, Equifax’s promotions included a Negative Option billing structure. 28.
Consumers who signed up to obtain their “free” scores received a free trial, usually either seven or 30 days, after which they were automatically enrolled in an Equifax monthly subscription that usually cost $16.95 per month unless they cancelled prior to the end of the free trial period. Equifax charged a consumer this recurring membership fee automatically each month through the consumer’s credit card until the consumer cancelled.
Equifax’s advertisements offering “free” Equifax Credit-Related Products failed to 29.
adequately disclose the Negative Option billing structure of the product.
The disclosure of the free trial terms in the advertisements was neither clear nor 30.
conspicuous. In contrast to the bold, colorful headlines that touted the free scores and products, the disclosure was often displayed in fine print, in low contrast, and was generally placed in a less prominent location, such as the bottom of the webpage, grouped with other disclosures.
In numerous instances, consumers did not know they had been automatically 31.
enrolled in a Negative Option subscription plan for Equifax Credit-Related 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 10 of 33
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Products until they discovered a charge–usually $16.95 per month–on their bank or credit card statement.
Section 1036(a)(1)(B) of the CFPA prohibits “unfair, deceptive, or abusive” acts or 32.
practices. 12 U.S.C. § 5536(a)(1)(B).
As described in Paragraphs 26 through 31, in connection with the advertising, 33.
marketing, promotion, offering for sale, or sale of Equifax Credit-Related Products, in numerous instances, Equifax represented, directly or indirectly, expressly or impliedly, that consumers could obtain their credit score for free.
In fact, Equifax’s offer, which it described in a disclosure that was neither clear 34.
nor conspicuous, was a Negative Option offer whereby Equifax automatically enrolled the consumer into a subscription plan that required the consumer to pay a recurring fee unless the consumer cancelled during the free trial period.
Therefore, Equifax engaged in deceptive acts or practices in violation of sections 35.
1031(a) and 1036(a)(1)(B) of the CFPA, 12 U.S.C. §§ 5531(a), 5536(a)(1)(B). Findings and Conclusions as to Placement of Advertisements of Equifax Products on AnnualCreditReport.com
The FCRA imposes upon each Nationwide Consumer Reporting Agency an 36.
obligation to provide a free file disclosure once every 12 months to any consumer who requests it. 15 U.S.C. § 1681j. Regulation V, the FCRA’s implementing regulation, requires all Nationwide Consumer Reporting Agencies to operate a “centralized source” to enable consumers to obtain annual file disclosures. 12 C.F.R. § 1022.136. The centralized website for free annual file disclosures is AnnualCreditReport.com.
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Consumers who wish to obtain a file disclosure through AnnualCreditReport.com 37.
must first supply certain identifying information on that website, including their name, social security number, and current address. The consumer is then given a choice to obtain his or her file disclosure from one or more of the Nationwide Consumer Reporting Agencies, including Equifax.
Until January 17, 2014, a consumer who chose to receive a file disclosure from 38.
Equifax was routed to a web page with a link labeled “View and Print your report. Get started.” This page also included an advertisement for an “Equifax Credit Score” at a “[o]ne-time price of only $7.95.” In order to actually view the file disclosure, however, the consumer would have to click a link to another page (which also contained advertisements) for a high-level summary of the file disclosure, and then click another link to access the web page that displayed the entire disclosure.
Regulation V prohibits CRAs, including Equifax, from advertising through the 39.
“centralized source” until “after the consumer has obtained his or her annual file disclosure.” 12 C.F.R. § 1022.136(g)(1). Where the request is made through the Internet, a consumer has “obtained” his or her disclosure when it is “delivered to the consumer.” 12 C.F.R. § 1022.136(g)(1)(ii).
As described in Paragraph 38, Equifax advertised credit-related products through 40.
AnnualCreditReport.com before consumers “obtained” their annual file disclosures. In order to obtain their file disclosures from Equifax, consumers had to navigate through two webpages. Nowhere on the first webpage, where Equifax’s advertisements first appeared, could consumers see or print their disclosures.
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Thus, Equifax’s placement of advertisements on webpages consumers accessed 41.
through AnnualCreditReport.com before consumers obtained their annual file disclosures violated Regulation V. 12 C.F.R. § 1022.136(g)(1). ORDER V Conduct Provisions IT IS ORDERED, under sections 1053 and 1055 of the CFPA, that:
Equifax and its officers, agents, servants, employees, and attorneys who have 42.
actual notice of this Consent Order, whether acting directly or indirectly, may not violate sections 1031 and 1036 of the CFPA, 12 U.S.C. §§ 5531 and 5536, and Regulation V, 12 C.F.R. § 1022.136(g), the implementing regulation of the FCRA, 15 U.S.C. §§ 1681 et seq., as follows, and must take the following affirmative actions:
a. Equifax, and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Equifax Credit-Related Products, may not misrepresent, or assist others in misrepresenting, expressly or impliedly:
Any material fact about the cost or price of an Equifax Credit-Related i.
Product, including misrepresenting that the product or service is free, discounted, a gift, a sample, a trial, a bonus, without cost or obligation, or words of similar import denoting or implying the absence of an obligation on the part of the consumer to affirmatively act in order to avoid charges;
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Any material fact about the timing or manner of any charge or bill, ii.
including the purpose for which a consumer’s credit card or payment information will be used, the length of subscription, if applicable, the date(s) upon which the consumer will be charged or billed, and the deadline (by date or frequency) by which the consumer must act in order to stop any charges; or
Any material restrictions, limitations, or conditions of the product or iii.
service marketed in the offer, or any material aspect of its performance, efficacy, nature, or central characteristics marketed in the offer. b. Within a reasonable time period after the Effective Date as set forth in the Compliance Plan, Equifax, and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Equifax Credit-Related Products:
Must obtain the express informed consent of the consumer before i.
enrolling the consumer in an Equifax Credit-Related Product with a Negative Option billing structure;
For all Internet offers, express informed consent consists of a (a) check box on the page where payment information is collected that consumers must affirmatively check to select the Negative Option billing structure (i.e., it cannot be pre-checked), and which clearly and conspicuously states that the consumer agrees 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 14 of 33
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to be billed for the product unless the consumer cancels before the trial period expires;
a. Immediately adjacent to the affirmative selection checkbox, Respondents must clearly and conspicuously disclose: (i) if applicable, the amount the consumer will be charged on a recurring (e.g., monthly) basis if the product or service is not cancelled before the expiration of the trial period; and (ii) the date when the trial period expires and the amount the consumer will be billed; and b. The disclosure must not contain any information related to the benefits of the product;
Must provide a simple mechanism for a consumer to immediately ii.
cancel the purchase of any Equifax Credit-Related Product, and stop billing and collecting payments for any recurring charge for any good or service. The mechanism must not be difficult, costly, confusing, or time consuming, and must, at a minimum, be substantially similar to the mechanism(s) the consumer used to initiate the purchase of any Equifax Credit-Related Product;
For all oral offers for an Equifax Credit-Related Product, in addition to iii.
clearly and conspicuously disclosing the information identified in Subsections (a)(i)-(iii), and prior to obtaining any billing information from a consumer, obtain affirmative and unambiguous oral confirmation that the consumer:
Consents to authorizing payment for such goods or services; and (a) 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 15 of 33
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Understands the specific steps the consumer must take to (b) prevent further charges.
c. Within a reasonable time period after the Effective Date as set forth in the Compliance Plan, Equifax, and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Equifax Credit-Related Products, including through textual, oral or audible communications, or communications disseminated through audible means or interactive media including, but not limited to, Internet advertisements, must take the following actions when offering or providing an Equifax Credit Score or other similar educational credit score to consumers:
Clearly and conspicuously disclose the nature of the credit score i.
offered in each communication containing the offer and, for Internet offers, on each landing page or email where a score is advertised and on at least one page of the order process;
Ensure that the disclosure clearly and conspicuously discloses or ii.
substantially states the following:
(a) The credit scores Equifax sells to consumers are not the same scores used by lenders or other commercial users for credit decisions; and (b) There are various types of credit scores, and lenders use a different type of credit score to make lending decisions than the one being offered;
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For all written communications, including, for Internet offers, landing iii.
pages and emails, ensure that, in the first instance in which the disclosures appear, the disclosures contain a label in a font size double that of the disclosure that says: “What You Need to Know.” d. Equifax, and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, must take the following actions:
Further develop and implement comprehensive policies and i.
procedures for improving communication with consumers regarding Equifax Credit-Related Products, including, but not limited to, communications about the nature of the credit score, the pricing structure, and any other material terms, including: (a) At least annually, collecting and reviewing key performance metrics, such as Consumer Complaints (both those it receives directly as well as those it receives through other channels, such as the CFPB and State Attorneys General Offices) and cancellation data, for evidence of consumer confusion regarding the products and services it offers to consumers; (b) At least annually, collecting and reviewing empirical data regarding consumer perceptions of Equifax’s advertising with regard to the nature of the credit score, the pricing structure, and any other material terms, for evidence of consumer confusion regarding the products and services it offers to consumers; and 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 17 of 33
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At least annually, assessing advertisements to determine what (c) modifications, if any, need to be made to the advertisements to improve consumer understanding of Equifax Credit-Related Products.
e. Equifax, and its officers, agents, servants, employees, and attorneys who have actual notice of this Consent Order, whether acting directly or indirectly, in connection with the advertising, marketing, promotion, offering for sale, sale, or performance of Equifax Credit-Related Products, may not place advertisements on webpages consumers access through AnnualCreditReport.com such that the consumer sees the advertisement before he or she has obtained his or her file disclosure in accordance with Regulation V. 12 C.F.R. § 1022.136(g).
VI Compliance Plan IT IS FURTHER ORDERED that:
Within 60 days of the Effective Date, Equifax must submit to the Assistant 43.
Deputy for Consumer Reporting, for review and determination of non-objection, a comprehensive compliance plan designed to ensure that Equifax’s advertising practices comply with all applicable Federal consumer financial laws, such as the CFPA and the FCRA, and the terms of this Consent Order (Compliance Plan). The Compliance Plan must include, at a minimum:
a. Detailed steps for addressing each action required by Section V of this Consent Order;
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b. Specific timeframes and deadlines for implementation of the steps described above; and c. A requirement that the Compliance Plan be updated at least every two years, or as required by changes in laws or regulations, so that the Compliance Plan remains current and effective.
The Assistant Deputy for Consumer Reporting will have the discretion to make a 44.
determination of non-objection to the Compliance Plan or to direct Equifax to revise it. If the Assistant Deputy for Consumer Reporting directs Equifax to revise the Compliance Plan, Equifax must make the revisions and resubmit the Compliance Plan to the Assistant Deputy for Consumer Reporting within 30 days. After receiving notification that the Assistant Deputy for Consumer Reporting 45.
has made a determination of non-objection to the Compliance Plan, Equifax must implement and adhere to the steps, recommendations, deadlines, and timeframes outlined in the Compliance Plan.
VII Role of the Board IT IS FURTHER ORDERED that:
The Board must review all submissions (including plans, reports, programs, 46.
policies, and procedures) required by this Consent Order prior to submission to the Bureau.
Although this Consent Order requires Equifax to submit certain documents for 47.
the review or non-objection by the Assistant Deputy for Consumer Reporting, the Board will have the ultimate responsibility for proper and sound management of 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 19 of 33
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Equifax and for ensuring that Equifax complies with Federal consumer financial law and this Consent Order.
In each instance that this Consent Order requires the Board to ensure adherence 48.
to, or perform certain obligations of Equifax, the Board must: a. Authorize whatever actions are necessary for Equifax to fully comply with the Consent Order;
b. Require timely reporting by management to the Board on the status of compliance obligations; and c. Require timely and appropriate corrective action to remedy any material noncompliance with any failures to comply with Board directives related to this Section.
VIII Order to Pay Redress IT IS FURTHER ORDERED that:
Within 10 days of the Effective Date, Equifax must reserve or deposit into a 49.
segregated deposit account $3,795,643 for the purpose of providing redress to Affected Consumers.
Within 60 days of the Effective Date, Equifax must submit to the Assistant 50.
Deputy for Consumer Reporting for review and non-objection a comprehensive written plan for providing redress consistent with this Consent Order (Redress Plan). The Assistant Deputy for Consumer Reporting will have the discretion to make a determination of non-objection to the Redress Plan or direct Equifax to revise it. If the Assistant Deputy for Consumer Reporting directs Equifax to revise the Redress Plan, Equifax must make the revisions and resubmit the Redress 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 20 of 33
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Plan to the Assistant Deputy for Consumer Reporting within 30 days. After receiving notification that the Assistant Deputy for Consumer Reporting has made a determination of non-objection to the Redress Plan, Equifax must implement and adhere to the steps, recommendations, deadlines, and timeframes outlined in the Redress Plan.
The Redress Plan must:
51.
a. Include a detailed description of the methodology used to determine the population of Affected Consumers and the appropriate redress for each Affected Consumer, and the procedures to issue and track redress payments; b. Provide that Equifax shall pay all costs associated with administering redress and remediation as required by this section;
c. Include the form of the letters (Notification Letters) and envelopes to be sent notifying consumers of the redress payments and a description of the process for sending the Notification Letters to consumers. Equifax must not include in any envelope containing a Notification Letter any materials other than the approved letter and redress checks.
d. Require Equifax to make reasonable attempts to obtain a current address for any consumer whose Notification Letter is returned for any reason, using the National Change of Address System, and to promptly re-mail all returned letters to current addresses. If a redress check for any consumer is returned to Equifax after such second mailing, or if a current mailing address cannot be identified using the National Change of Address System or similar system, Equifax must retain the redress amount of such consumer for a period of one hundred and twenty (120) days from the date the check was originally mailed, 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 21 of 33
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during which period such amount may be claimed by such consumer upon appropriate proof of identity.
e. Require Equifax to submit a Redress Plan Report to the Assistant Deputy for Consumer Reporting within 60 days of completion of the Redress Plan. The Redress Plan Report must include an audit and assessment of Equifax’s compliance with the terms of the Redress Plan.
After completing the Redress Plan, if the amount of the redress provided to 52.
Affected Consumers is less than $3,795,643, within 30 days of the completion of the Redress Plan, Equifax must pay the Bureau, by wire transfer to the Bureau or to the Bureau’s agent, and according to the Bureau’s wiring instructions, the difference between the amount of redress provided to Affected Consumers and $3,795,643, so that such funds may be distributed to the U.S. Treasury as disgorgement.
Equifax may not condition the provision of any redress to any Affected Consumer 53.
under this Order on that Affected Consumer waiving any right. IX Order to Pay Civil Money Penalties IT IS FURTHER ORDERED that:
Under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c), by reason of the 54.
violations of law described in Section IV of this Consent Order, and taking into account the factors in 12 U.S.C. § 5565(c)(3), Equifax must pay a civil money penalty of $2,500,000 to the Bureau.
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Within 10 days of the Effective Date, Equifax must pay the civil money penalty by 55.
wire transfer to the Bureau or to the Bureau’s agent in compliance with the Bureau’s wiring instructions.
The civil money penalty paid under this Consent Order will be deposited in the 56.
Civil Penalty Fund of the Bureau as required by section 1017(d) of the CFPA, 12 U.S.C. § 5497(d).
Equifax must treat the civil money penalty paid under this Consent Order as a 57.
penalty paid to the government for all purposes. Regardless of how the Bureau ultimately uses those funds, Equifax may not:
a. Claim, assert, or apply for a tax deduction, tax credit, or any other tax benefit for any civil money penalty paid under this Consent Order; or b. Seek or accept, directly or indirectly, reimbursement or indemnification from any source, including but not limited to payment made under any insurance policy, with regard to any civil money penalty paid under this Consent Order. To preserve the deterrent effect of the civil money penalty in any Related 58.
Consumer Action, Equifax may not argue that Equifax is entitled to, nor may Equifax benefit by, any offset or reduction of any compensatory monetary remedies imposed in the Related Consumer Action because of the civil money penalty paid in this action (Penalty Offset). If the court in any Related Consumer Action grants such a Penalty Offset, Equifax must, within 30 days after entry of a final order granting the Penalty Offset, notify the Bureau, and pay the amount of the Penalty Offset to the U.S. Treasury. Such a payment will not be considered an additional civil money penalty and will not change the amount of the civil money penalty imposed in this action.
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X Additional Monetary Provisions IT IS FURTHER ORDERED that:
In the event of any default on Equifax’s obligations to make payment under this 59.
Consent Order, interest, computed under 28 U.S.C. § 1961, as amended, will accrue on any outstanding amounts not paid from the date of default to the date of payment, and will immediately become due and payable. Equifax must relinquish all dominion, control, and title to the funds paid to the 60.
fullest extent permitted by law and no part of the funds may be returned to Equifax.
Under 31 U.S.C. § 7701, Equifax, unless it already has done so, must furnish to 61.
the Bureau its taxpayer identifying numbers, which may be used for purposes of collecting and reporting on any delinquent amount arising out of this Consent Order.
Within 45 days of the entry of a final judgment, consent order, or settlement in a 62.
Related Consumer Action, Equifax must notify the Assistant Deputy for Consumer Reporting of the final judgment, consent order, or settlement in writing. That notification must indicate the amount of redress, if any, that Equifax paid or is required to pay to consumers and describe the consumers or classes of consumers to whom that redress has been or will be paid. 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 24 of 33
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XI Reporting Requirements IT IS FURTHER ORDERED that:
Equifax must notify the Bureau of any development that may affect compliance 63.
obligations arising under this Consent Order, including but not limited to, a dissolution, assignment, sale, merger, or other action that would result in the emergence of a successor company to Equifax; the creation or dissolution of a subsidiary, parent, or affiliate of Equifax that engages in any acts or practices subject to this Consent Order; the filing of any bankruptcy or insolvency proceeding by or against Equifax; or a change in Equifax’s name or address. Equifax must provide this notice, if practicable, at least 30 days before the development, but in any case no later than 14 days after the development. Within 7 days of the Effective Date, Equifax must designate at least one telephone 64.
number and email, physical, and postal address as points of contact, which the Bureau may use to communicate with Equifax.
Equifax must report any change in the information required to be submitted 65.
under Paragraph 63 at least 30 days before the change or as soon as practicable after the learning about the change, whichever is sooner. Within 120 days of the Effective Date, and again one year after the Effective Date, 66.
Equifax must submit to the Assistant Deputy for Consumer Reporting an accurate written compliance progress report (Compliance Report) that has been approved by the Board, which, at a minimum:
a. Describes in detail the manner and form in which Equifax has complied with this Order; and 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 25 of 33
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b. Attaches a copy of each Order Acknowledgment obtained under Section XII, unless previously submitted to the Bureau.
XII Order Distribution and Acknowledgment IT IS FURTHER ORDERED that:
Within 30 days of the Effective Date, Equifax must deliver a copy of this Consent 67.
Order to each of its board members and executive officers, as well as to any managers, employees, affiliates, service providers, or other agents and representatives who have responsibilities related to the subject matter of the Consent Order.
For 5 years from the Effective Date, Equifax must deliver a copy of this Consent 68.
Order to any business entity resulting from any change in structure referred to in Section XI, any future board members and executive officers, as well as to any managers, employees, affiliates, service providers, or other agents and representatives who will have responsibilities related to the subject matter of the Consent Order before they assume their responsibilities. Equifax must secure a signed and dated statement acknowledging receipt of a 69.
copy of this Consent Order, ensuring that any electronic signatures comply with the requirements of the E-Sign Act, 15 U.S.C. § 7001 et seq., within 30 days of delivery, from all persons receiving a copy of this Consent Order under this Section.
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XIII Recordkeeping IT IS FURTHER ORDERED that:
Equifax must create, or if already created, must retain for at least 5 years from the 70.
Effective Date, the following business records: a. All documents and records necessary to demonstrate full compliance with each provision of this Consent Order, including all submissions to the Bureau.
b. All documents and records pertaining to the Redress Plan, described in Section VIII above.
c. Copies of all Internet (website), direct email, and print advertisements, sufficient to demonstrate the experience of consumers on each materially different version of each advertisement, including all order flow pages on which Equifax, whether acting directly or indirectly, advertises, promotes, markets, offers for sale, sells, or provides Equifax Credit-Related Products or services, and any other marketing material, including, but not limited to, sales scripts and training materials relating to Equifax Credit-Related Products, including any such materials used by a third party or affiliate on behalf of Equifax;
d. For each Internet (website), direct email, print advertisement, or other marketing material relating to Equifax Credit-Related Products: A record of the date(s) and locations or placements where the i.
advertisement is publicly accessible, to extent that information is available; the number, type, and cost of all Equifax Credit-Related 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 27 of 33
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Products purchased through the advertisement; and any and all modifications made to the advertisement, including to any disclosure(s) on the advertisement; and
A record of all consumer perception assessments or testing and all ii.
documents created pursuant to the requirements of Section V. e. For each Internet (website) advertisement, impressions of, the number of visits to, unique visitors (to the extent such data is available), and clicks on the advertisement and any associated landing and flow page(s); and the number of conversions, purchases of an Equifax Credit-Related Product, and consumers acquired through the advertisement. f.
For each individual Affected Consumer: the consumer’s name, address, phone number, email address, amount paid, description of the Equifax Credit- Related Product purchased, the date on which the Equifax Credit-Related Product was purchased, and, if applicable, the date, and reason (when available), consumer left the program.
g. For each Equifax Credit-Related Product, accounting records showing the gross and net revenues generated by the Equifax Credit-Related Product. h. All non-telephonic Consumer Complaints and refund requests (whether received directly or indirectly, such as through a third party) relating to any Equifax Credit-Related Product, and any responses to those complaints or requests.
i.
Equifax must make the documents identified in Paragraph 70 available to the Bureau upon the Bureau’s request.
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Equifax will retain telephonic communications with consumers in accordance 71.
with its standard document retention policy, as set forth in the Compliance Plan. XIV Notices IT IS FURTHER ORDERED that:
72.
Unless otherwise directed in writing by the Bureau, Equifax must provide all submissions, requests, communications, or other documents relating to this Consent Order in writing, with the subject line, “In re Equifax Inc., File No. 2017-CFPB-0001,” and send them either:
a. By overnight courier (not the U.S. Postal Service), as follows: Assistant Deputy for Consumer Reporting Consumer Financial Protection Bureau Office of Supervision 1625 Eye Street, N.W.
Washington, D.C. 20006 b. By first-class mail to the below address and contemporaneously by email to [email protected]:
Assistant Deputy for Consumer Reporting Consumer Financial Protection Bureau Office of Supervision 1625 Eye Street, N.W.
Washington, D.C. 20006 XV Cooperation with the Bureau IT IS FURTHER ORDERED that:
Respondents must cooperate fully to help the Bureau determine the identity and 73.
location of each Affected Consumer. Respondents must provide such information 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 29 of 33
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in their or their agents’ possession or control within 21 days of receiving a written request from the Bureau.
XVI Compliance Monitoring IT IS FURTHER ORDERED that, to monitor Equifax’s compliance with this Consent Order:
Within 21 days of receipt of a written request from the Bureau, Equifax must 74.
submit additional Compliance Reports or other requested information, which must be made under penalty of perjury; provide sworn testimony; or produce documents.
Equifax must permit Bureau representatives to interview any employee or other 75.
person affiliated with Equifax who has agreed to such an interview. The person interviewed may have counsel present.
Nothing in this Consent Order will limit the Bureau’s lawful use of civil 76.
investigative demands under 12 C.F.R. § 1080.6 or other compulsory process. XVII Modifications to Non-Material Requirements IT IS FURTHER ORDERED that:
Equifax may seek a modification to non-material requirements of this Consent 77.
Order (e.g., reasonable extensions of time and changes to reporting requirements) by submitting a written request to the Assistant Deputy for Consumer Reporting.
The Assistant Deputy for Consumer Reporting may, in his/her discretion, modify 78.
any non-material requirements of this Consent Order (e.g., reasonable extensions 2017-CFPB-0001 Document 1 Filed 01/03/2017 Page 30 of 33
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of time and changes to reporting requirements) if he/she determines good cause justifies the modification. Any such modification by the Assistant Deputy for Consumer Reporting must be in writing.
XVIII Administrative Provisions
The provisions of this Consent Order do not bar, estop, or otherwise prevent the 79.
Bureau, or any other governmental agency, from taking any other action against Equifax, except as described in Paragraph 80.
The Bureau releases and discharges Equifax from all potential liability for law 80.
violations that the Bureau has or might have asserted based on the practices described in Section IV of this Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. The Bureau may use the practices described in this Consent Order in future enforcement actions against Equifax and its affiliates, including, without limitation, to establish a pattern or practice of violations or the continuation of a pattern or practice of violations or to calculate the amount of any penalty. This release does not preclude or affect any right of the Bureau to determine and ensure compliance with the Consent Order, or to seek penalties for any violations of the Consent Order.
This Consent Order is intended to be, and will be construed as, a final Consent 81.
Order issued under section 1053 of the CFPA, 12 U.S.C. § 5563, and expressly does not form, and may not be construed to form, a contract binding the Bureau or the United States.
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This Consent Order will terminate 5 years from the Effective Date or 5 years from 82.
the most recent date that the Bureau initiates an action alleging any violation of the Consent Order by Equifax. If such action is dismissed or the relevant adjudicative body rules that Equifax did not violate any provision of the Consent Order, and the dismissal or ruling is either not appealed or upheld on appeal, then the Consent Order will terminate as though the action had never been filed. The Consent Order will remain effective and enforceable until such time, except to the extent that any provisions of this Consent Order have been amended, suspended, waived, or terminated in writing by the Bureau or its designated agent.
Calculation of time limitations will run from the Effective Date and be based on 83.
calendar days, unless otherwise noted.
Should Equifax seek to transfer or assign all or part of its operations that are 84.
subject to this Consent Order, Equifax must, as a condition of sale, obtain the written agreement of the transferee or assignee to comply with all applicable provisions of this Consent Order.
The provisions of this Consent Order will be enforceable by the Bureau. For any 85.
violation of this Consent Order, the Bureau may impose the maximum amount of civil money penalties allowed under section 1055(c) of the CFPA, 12 U.S.C. § 5565(c). In connection with any attempt by the Bureau to enforce this Consent Order in federal district court, the Bureau may serve Equifax’s Registered Agent or designated point of contact for Consent Order-related communications as described in Paragraph 64 above and Equifax may not contest that court’s personal jurisdiction over Equifax.
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2017-CFPB-0001 Document’ Filed 01/03/2017 Page 33 of 33
86. This Consent Order and the accompanying Stipulation contain the complete agreement between the parties. The parties have made no promises, representations, or warranties other than what is contained in this Consent Order and the accompanying Stipulation. This Consent Order and the accompanying Stipulation supersede any prior oral or written communications, discussions, or understandings.
87. Nothing in this Consent Order or the accompanying Stipulation may be construed as allowing Equifax, its Board, officers, or employees to violate any
law, rule, or regulation.
IT ISSO ORDERED, this are day of January, 2017.
nha) Crdore
Richard Cordray Director Consumer Financial Protection Bureau
Stipulation ()
PDF of this document (4 pages)
Page 35
UNITED STATES OF AMERICA CONSUMER FINANCIAL PROTECTION BUREAU File No. 2017-CFPB-0001 STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER In the matter of:
Equifax Inc. and Equifax Consumer Services LLC The Consumer Financial Protection Bureau (Bureau) intends to initiate an administrative proceeding against Equifax Inc. and Equifax Consumer Services LLC (collectively, Equifax or Respondents), under 12 U.S.C. §§ 5563 and 5565, for its deceptive and misleading advertisements for Equifax Credit-Related Products in violation of the Consumer Financial Protection Act’s (CFPA) prohibition on unfair, deceptive, or abusive acts or practices, 12 U.S.C. §§ 5531, 5536, and for its violation of the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681-1681x, as implemented by Regulation V, 12 C.F.R. § 1022.136(g)(1).
Equifax, in the interest of compliance and resolution of the matter, and without admitting or denying any wrongdoing, consents to the issuance of a Consent Order substantially in the form of the one to which this Stipulation and Consent to the Issuance of a Consent Order is attached (Consent Order), and which is incorporated by reference.
2017-CFPB-0001 Document 2 Filed 01/03/2017 Page 1 of 4
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In consideration of the above premises, Equifax agrees to the following: Jurisdiction
The Bureau has jurisdiction over this matter under sections 1053 and 1055 of the 1.
CFPA, 12 U.S.C. §§ 5563, 5565, and section 621 of the FCRA, 15 U.S.C. § 1681s. Consent
Equifax agrees to the issuance of the Consent Order, without admitting or 2.
denying any of the findings of fact or conclusions of law, except that Equifax admits the facts necessary to establish the Bureau’s jurisdiction over Equifax and the subject matter of this action.
Equifax agrees that the Consent Order will be deemed an “order issued with the 3.
consent of the person concerned” under 12 U.S.C. § 5563(b)(4), and agrees that the Order will become a final order, effective upon issuance, and will be fully enforceable by the Bureau under 12 U.S.C. §§ 5563(d)(1) and 5565.
Equifax voluntarily enters into this Stipulation and Consent to the Issuance of a 4.
Consent Order.
The Consent Order resolves only Equifax’s potential liability for law violations 5.
that the Bureau asserted or might have asserted based on the practices described in Section IV of the Consent Order, to the extent such practices occurred before the Effective Date and the Bureau knows about them as of the Effective Date. Equifax acknowledges that no promise or representation has been made by the Bureau or any employee, agent, or representative of the Bureau, about any liability outside of this action that may have arisen or may arise from the facts underlying this action or immunity from any such liability. 2017-CFPB-0001 Document 2 Filed 01/03/2017 Page 2 of 4
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Equifax agrees that the facts described in Section IV of the Consent Order will be 6.
taken as true and be given collateral estoppel effect, without further proof, in any proceeding before the Bureau to enforce the Consent Order, or in any subsequent civil litigation by the Bureau to enforce the Consent Order or its rights to any payment or monetary judgment under the Consent Order.
The terms and provisions of this Stipulation and the Consent Order will be 7.
binding upon, and inure to the benefit of, the parties hereto and their successors in interest.
Equifax agrees that the Bureau may present the Consent Order to the Bureau 8.
Director for signature and entry without further notice. Waivers
Equifax, by consenting to this Stipulation, waives: 9.
a. Any right to service of the Consent Order, and agrees that issuance of the Consent Order will constitute notice to the Equifax of its terms and conditions;
b. Any objection to the jurisdiction of the Bureau, including, without limitation, under section 1053 of the CFPA, 12 U.S.C. § 5563; c. The rights to all hearings under the statutory provisions under which the proceeding is to be or has been instituted; the filing of proposed findings of fact and conclusions of law; proceedings before, and a recommended decision by, a hearing officer; all post-hearing procedures; and any other procedural right available under section 1053 of the CFPA, 12 U.S.C. § 5563, or 12 CFR Part 1081;
d. The right to seek any administrative or judicial review of the Consent Order; 2017-CFPB-0001 Document 2 Filed 01/03/2017 Page 3 of 4
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2017-CFPB-0001 Document2 Filed 01/03/2017 Page 4 of 4
e. Any claim for fees, costs or expenses against the Bureau, or any of its agents
or employees, and any other governmental entity, related in any way to this enforcement matter or the Consent Order, whether arising under common law or under the terms of any statute, including, but not limited to the Equal Access to Justice Act and the Small Business Regulatory Enforcement Fairness Act of 1996; for these purposes, Equifax agrees that Equifax is not the prevailing party in this action because the parties have reached a good faith settlement;
Any other right to challenge or contest the validity of the Consent Order; Such provisions of the Bureau’s rules or other requirements of law as may be construed to prevent any Bureau employee from participating in the preparation of, or advising the Director as to, any order, opinion, finding of fact, or conclusion of law to be entered in connection with this Stipulation or
the Consent Order; and
h. Any right to claim bias or prejudgment by the Director based on the
consideration of or discussions concerning settlement of all or any part of the
proceeding.
EQUIFAX INC. BY:
John J.
December 22, 2016 elley HI Date
Corporate Vice President and Chief Legal Officer,
Equifax Inc. and Equifax Consumer Services LLC