TransUnion, Equifax fined by U.S. watchdog for misleading consumers about credit scores

Update:

Credit monitoring companies such as Equifax and TransUnion offer consumers a peek at their credit histories.
Credit monitoring companies such as Equifax and TransUnion offer consumers a peek at their credit histories. ((iStock))

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Firms must pay $23 million US in fines and reimbursements

Two of the largest credit monitoring firms have been fined by a major U.S. financial watchdog for misleading consumers about the value of the services they provide.

Equifax and TransUnion — based in Atlanta and Chicago, respectively — have been fined a total of $5.5 million US for luring unwitting consumers “into costly recurring payments for credit-related products with false promises,” the Consumer Financial Protection Bureau said in a release. In addition to the fine, both companies have been ordered to reimburse consumers for $17.6 million they shouldn’t have been charged for services.

Credit scores

Along with others in the industry, both companies make money by selling consumers information about their credit histories, which is used to determine the rates and loan amounts they will be offered by lenders in the future. They both also sell services aimed at keeping their private information safe and secure, also with an aim of making customers more credit-worthy.

One of their major services is to give customers their credit score, which is a number tabulated to summarize their overall credit-worthiness. A higher score means the person is a solid bet to repay a loan. A lower score means they are less so — and by extension might need to take steps to improve their credit. One of the services the companies offer to help do that is known as credit monitoring, which the companies sell for as much as $16 per month.

The reporting agencies base the scores on a consumer’s history of paying off debt, how much debt they carry and other factors.

But the CFPB said the scores sold to consumers by TransUnion and Equifax were not typically used by lenders to make credit decisions.

Instead, lenders evaluate potential borrowers by using an array of credit scores, which vary by score provider and scoring model. Different credit “scores” are not necessarily correlated to each other, a CFPB report from 2012 found, which means consumers could be misled about their actual credit-worthiness if they paid attention solely to the information being given to them from one company.

“TransUnion and Equifax deceived consumers about the usefulness of the credit scores they marketed, and lured consumers into expensive recurring payments with false promises,” said CFPB director Richard Cordray. “Credit scores are central to a consumer’s financial life and people deserve honest and accurate information about them.”

The agency says TransUnion has been misleading consumers about their actual credit scores since at least 2011. Equifax, meanwhile, was doing the same between 2011 up to 2014.

TransUnion said in a statement it continues to believe that its advertising has been clear and has complied with laws.

“Our trial credit monitoring service has given consumers low-cost access to their credit report and credit score and allowed them to conveniently cancel monitoring services at any time online or by phone,” the company said. “However, we are committed to making improvements to our consumer experience, and over the past several months we have worked co-operatively with the CFPB to be the industry leader in designing the enhanced, voluntary marketing disclosures that go beyond the current legal and regulatory requirements to which we agreed as part of this settlement.”

TransUnion noted that the company’s practices in Canada are not included in the CFPB action.

“Consumer solutions offered by TransUnion Canada remain in compliance with all applicable local laws,” TransUnion said. “As always, we remain committed to providing consumers with access to information about their credit that can help them make informed financial decisions.”

Equifax noted that the CFPB’s investigation continued for nearly three years, and said it made changes to address the agency’s concerns soon after the investigation began. “While Equifax does not believe it has violated any laws and has not admitted any liability, Equifax determined it was in its best interest to resolve the matter with the CFPB,” the company’s statement said.

Toronto taxi scam: cabbies swiping bank cards from passengers

Update:

Toronto police warn that a group of cab drivers has been swiping riders' bank cards as they pay — and then driving straight to ATM machines to empty bank accounts before victims even realize what's happened. Dozens of cab riders have been victimized across the city in recent weeks and the crimes are continuing daily, the lead investigator in the case said Friday.
Toronto police warn that a group of cab drivers has been swiping riders’ bank cards as they pay — and then driving straight to ATM machines to empty bank accounts before victims even realize what’s happened.
Dozens of cab riders have been victimized across the city in recent weeks and the crimes are continuing daily, the lead investigator in the case said Friday.

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Taxi drivers have taken more than $55,000 from cab riders by stealing debit cards: Toronto police

The next time you pay by debit in a taxi, keep a close eye on your card.

Toronto police warn that a group of cab drivers has been swiping riders’ bank cards as they pay — and then driving straight to ATM machines to empty bank accounts before victims even realize what’s happened.

Dozens of cab riders have been victimized across the city in recent weeks and the crimes are continuing daily, the lead investigator in the case said Friday.

The number of reports coming into police across the city “has escalated quite a bit” in recent days, Det. Chris Beattie said in an interview with CBC News.

He said it appears that a “small group” of drivers is carrying out the fraud.

taxi-cab-light

Toronto police warn passengers to keep a close eye on their debit cards when paying in taxis amid a scam where some cab drivers are taking people’s bank cards and swapping them for a fake card.

Beattie said it’s happening primarily to people catching taxis in the downtown core, mostly late at night. But, it is also happening at other hours and in other locations.

“You flag down a cab, they have a point-of-sale machine that’s programmed to store the information from your card, they put your card in it, you punch in your PIN numbers, he’ll take the machine back, pull out your card and switch it with a fake card from the same bank.”

Beattie warns passengers to look carefully at both the debit card and the receipt they get back. The receipts typically say “Toronto Cabs” or “GTA Taxi” at the top, rather than the legitimate name of the company.

Another red flag is that the taxi driver sometimes says he doesn’t have change if you try to pay with cash, said Beattie.

He said it is not clear whether those involved are legitimate taxi drivers with major cab companies. Police suggest riders always take note of the company and number of the taxi they catch.

Police got wind of the fraud in mid-December when a TD Bank fraud investigator reported a pattern of 12 incidents in which cab riders saw more than $55,000 taken from their accounts.

A similar scam led to charges in Montreal last year. One victim, Julie Piesina told CBC News how hundreds of dollars disappeared from her account after she paid for a cab with her bank card.

And in the summer of 2014, Peel Regional Police warned of a similar scam happening with both limousines and taxis out of Pearson Airport.

Toronto Police Constable Fievel Yee Kan Preyed on Vulnerable People in Fake Ticket Scheme

Update:

Toronto Police Headquarters. Toronto Police Constable Fievel Kan turned off the in-cruiser video camera and issued 19 fake tickets to 12 individuals who were either homeless or suffered from mental illness over a two month period in 2014. He was charged with discreditable conduct and insubordination as a result and found guilty of both charges. He was fined fifteen days pay.
Toronto Police Headquarters. Toronto Police Constable Fievel Kan turned off the in-cruiser dashcam camcorder while he issued 19 fake tickets to 12 individuals who were either homeless or suffered from mental illness over a two month period in 2014. He was charged with discreditable conduct and insubordination as a result and found guilty of both charges. Kan’s salary earned him $116,746.48 in 2014. As a result of being found guilty on both charges, Kan was fined fifteen days pay. 

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Disciplinary decision notes that those ticketed included ‘the homeless and others with mental illness.’

A Toronto police officer remains on the job after admitting to issuing unjustifiable tickets to homeless people and other individuals with mental health issues over several weeks in 2014 while working in 14 Division’s Primary Response unit.

In 19 instances between March 30 and May 19, 2014, Toronto police Const. Fievel Kan wrote Provincial Offence Notices to 12 separate people “without sufficient evidence,” according to a decision from the Toronto Police Service’s disciplinary hearings office.

“In some of those instances no such offences were committed by the defendants,” Supt. Scott Weidmark wrote in the decision.

The quasi-judicial disciplinary hearings office issues judgments on allegations of police misconduct.

The decision notes the people given tickets “included the homeless and others with mental illness.”

“He was writing tickets to people where … he would get credit on his performance report showing that he wrote a ticket,” Weidmark said by phone. “These people normally would never go to court. So he was just trying to benefit from increasing his numbers, so to speak.”

None of the victims attempted to pay for their tickets, according to the decision.

Kan was charged with discreditable conduct for issuing the tickets. He was also charged with insubordination for not using his in-car camera during all 19 interactions, a violation of police procedure.

Kan pleaded guilty to both charges on March 5. The decision describes Kan as remorseful, noting that he sought to “resolve this issue as soon as possible” and issued an oral apology during the proceeding.

Kan was disciplined in the past for missing an accident court appearance. He had also received letters of appreciation and been commended for his performance.

The decision states that there was no evidence to suggest why Kan did not activate his camera, but Weidmark wrote that “it is reasonable to conclude” he was trying to conceal his actions.

Kan declined to comment when reached by phone on Tuesday. “I’m very sorry. I don’t want to comment on this case,” Kan said. “It’s been dealt with.”

Kan said that he was currently working in “primary response … answering radio calls,” and would not elaborate on his motivations for issuing the fake tickets.

Defence counsel Gary Clewley declined to comment.

Police have been using dashcams in their vehicles and unmarked vehicles since 2011. When police approach someone's vehicle, the camcorder is running and the officer is wearing a microphone that is on during his or her conversation with the occupant(s) of the vehicle. This has been going on for years and many members of the public are unaware of it, until police use video/audio against them in court - especially traffic related violations.
Police have been using dashcams in their vehicles and unmarked vehicles since 2011. When police approach someone’s vehicle, the camcorder is running and the officer is wearing a microphone that is on during his or her conversation with the occupant(s) of the vehicle. Kan purposely turned his off (which is contrary to police policy), while these fake tickets were issued. He was found guilty on the charge of insubordination as a result of turning the dashcam off during the times that he issued these tickets.

Weidmark wrote that Clewley claimed the officer issued tickets in areas “of general disorder…where the public may fear aggressive panhandlers.”

Clewley also argued that the officer “could have issued some tickets for offences that were actually committed.”

But Weidmark argued that there was no evidence to support this claim, and wrote that “knowledgeable officers can find some act or bylaw violated where disorder is occurring.”

Weidmark added that legitimately laying a ticket on a vulnerable person “is serving no real benefit to society where alternative solutions may exist.”

The decision cites a psychologist’s report that apparently said Kan “felt pressured to issue more tickets.”

Weidmark said there were no quotas in place but cited the Police Services Act and argued that officers have a mandate to “participate in prosecutions.”

“He’d be compared to everybody else, and if his numbers were way below everybody else, then he’d be getting pressure from his management team to be more productive out there,” Weidmark said.

Defence counsel argued that “Kan’s personal life was ‘a disaster waiting to happen,’” according to the decision. Without offering specifics, the decision notes that “Kan faced many challenges early in life,” which could have contributed to him being stressed and depressed.

Kan did not seek support until after issuing the false tickets, and has since received counselling, according to the decision.

Kan forfeited 15 days’ or 120 hours’ payment for the discreditable conduct charge and 10 days’ or 80 hours’ pay for the insubordination charge. The punishments were served concurrently.

Kan will also “be carefully observed” and his tickets will be reviewed, according to the decision.

Spokesperson Mark Pugash defended the punishments in an interview.

“Prosecutors and tribunals are bound by other decisions. These decisions are not made in isolation,” Pugash said. “The superintendent considered other, similar cases and the penalties that were awarded.”

In one case described in the decision, an officer with “anxiety and emotional issues” pleaded guilty to writing 63 illegitimate Provincial Offence Notices against two homeless people. Some of the tickets resulted in convictions in absentia, according to the decision.

The officer received a five-day penalty.

Police spokesperson Meaghan Gray confirmed via email that a freedom of information request was necessary to view other records related to the proceeding.

Bell Has $1.25 Million Reasons to Stop Encouraging Their Employees to Write Rave Reviews For Their Apps.

Update:

Canada's Competition Bureau took issue with the fact some Bell Canada employees wrote glowing reviews for a company app without disclosing where they worked.
Canada’s Competition Bureau took issue with the fact some Bell Canada employees wrote glowing reviews for a company app without disclosing where they worked.

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Competition Bureau tells Bell to stop encouraging workers to write rave reviews

Canada’s Competition Bureau has slapped Bell Canada with a $1.25 million fine for encouraging employees to plant glowing online reviews for two company phone apps.

The legitimacy of online reviews has become a growing concern in the digital world where reviewers often remain anonymous.

The Bell and Virgin mobile apps were launched in November 2014 and immediately garnered four-star reviews on Apple’s iTunes App Store and Google Play Store. At the time, CBC News reported that possibly half a dozen or more of the rave write-ups were penned by Bell Canada employees – many in senior positions. None of the workers disclosed that they worked for Bell.

In a ruling issued today, the Competition Bureau stated that it “determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps.”

According to the Bureau, along with paying a fine, Bell has “affirmed its commitment not to direct, encourage or incentivize its employees” to review company products in app stores. The  telecommunications company will also sponsor and host a workshop to foster trust in the digital world.

Canada’s competition watchdog also noted that Bell removed the reviews shortly after the issue first came to light.

Canada's Competition Bureau has slapped Bell Canada with a $1.25 million fine for encouraging employees to plant glowing online reviews for two company phone apps.
Canada’s Competition Bureau has slapped Bell Canada with a $1.25 million fine for encouraging employees to plant glowing online reviews for two company phone apps.

Whistleblower is pleased

“To see that they got fined, I’m very happy,” says Scott Stratten, president of UnMarketing, a company that writes about unethical marketing tactics.

He first uncovered the planted Bell reviews. Stratten noticed something was amiss when reading reviews for the latest version of the MyBell Mobile app after it launched last November.

He thought some of the language used was suspicious. For example, S Saade wrote: “Excellent new app. Looking forward to updates with residential services.”

“Just words that you do not say in real life,” Stratten said at the time.

He began cross-checking reviewers’ user names with LinkedIn profiles where people list their work status. He discovered many of the positive reviewers were actually Bell employees.

For example, “S Saade,” turned out to be Saad Saade on Linkedin who was vice-president of IT Bell Mobility. Reviewer Tori Brown wrote: “Awesome app! Love it!” Stratten found a Tori Brown on LinkedIn who also turned out to be a senior project manager at Bell.

Stratten tells CBC News that he hopes Bell’s fine will serve as a deterrent. “With no repercussion to an action, then there’s no reason not to do it again,” he says.

He believes many companies plant reviews to bolster products. But he says perhaps now they will think twice knowing the Competition Bureau could take serious action.

“It’s sending a message to everybody, saying ethics are important and we will be watching over it.”

Bell hit with $1.25M fine by the Competition Bureau for planting 4-star reviews for phone apps. by their employees.
Bell hit with $1.25M fine by Canada’s Competition Bureau for planting 4-star reviews for phone apps. through their employees.

This is the decision referred to by the Competition Bureau:

Bell Canada reaches agreement with Competition Bureau over online reviews

October 14, 2015 — OTTAWA, ON — Competition BureauAs part of an agreement reached with the Competition Bureau, Bell Canada (Bell) has affirmed its commitment not to direct, encourage or incentivize its employees or contractors to rate, rank or review apps in app stores.In November 2014, certain Bell employees were encouraged to post positive reviews and ratings of the free MyBell Mobile app and Virgin My Account app on the iTunes App Store and the Google Play Store, without disclosing that they work for Bell. Bell acted quickly to have the reviews and ratings removed as soon as it became aware of the matter. Nevertheless, the Bureau determined that these reviews and ratings created the general impression that they were made by independent and impartial consumers and temporarily affected the overall star rating for the apps. The apps allow Bell customers to manage their existing mobility accounts directly from their mobile devices.Bell provided full, timely and ongoing co-operation with the Bureau’s inquiry.Under the consent agreement registered with the Competition Tribunal, Bell has also agreed to:

  • enhance and maintain its corporate compliance program, with a specific focus on prohibiting the rating, ranking or reviewing of apps in app stores by employees and contractors; and
  • pay an administrative monetary penalty of $1,250,000.

In addition to the consent agreement, Bell has indicated that it will sponsor and host a workshop to promote, discuss and enhance Canadians’ trust in the digital economy, including the integrity of online reviews.

Quote

“I am pleased that Bell Canada demonstrated leadership to fully resolve the Competition Bureau’s concerns in this matter. Bell’s senior management acted quickly to remove the reviews of the apps that had been posted by its employees and has taken steps to prevent it from happening again. I commend the shared compliance approach taken by Bell to resolve this matter, which will benefit both consumers and the digital marketplace.”

John Pecman,
Commissioner of Competition

Hamilton Police – A Dozen Officers Now On Paid Suspension

Update: see previous post – June 16, 2015 Fake Ticket Scam – Seven Hamilton Police Arrested

Hamilton Police Chief Glenn De Caire has been fighting to end paid suspension for police officers since 2014. (Adam Carter/CBC)
Hamilton Police Chief Glenn De Caire has been fighting to end paid suspension for police officers since 2014. (Adam Carter/CBC)

Paying officers accused of criminal or police act offences costs taxpayers $500,000 annually

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A dozen Hamilton Police Service officers are now being paid to sit at home — and in at least one case, behind bars — because of a provincial policy that is costing the city half a million dollars every year.

Factoring in the seven officers arrested Tuesday from the high profile ACTION team, five of whom have been criminally charged in an alleged fake ticket writing scam, the Hamilton Police Service has 12 officers under paid suspension.

Police Board chair Lloyd Ferguson said that the paid suspension policy is costing the city $500,000 annually.

Hamilton Police Chief Glenn De Caire has backed the fight for unpaid suspensions for the past year, including bringing the issue to the annual general meeting of the Ontario Association of Chiefs of Police in 2014. The ask is now before the provincial government for consideration.

The public push came after Hamilton Police inspector David Doel collected more than $550,000 in pay and then retired before having to face a tribunal process last year. Doel faced 14 charges under the Police Services Act including having sex on the job, keeping pornography on his work computer and using video equipment and the national criminal database for his own personal use.

Detectives began an investigation when tickets were found in a service shredder box. The tickets in the books that should have to be given to the person being ticketed were still attached. The tickets were logged with the courts and counted as police statistics, but were never handed out.
Detectives began an investigation when tickets were found in a service shredder box. The tickets in the books that should have to be given to the person being ticketed were still attached. The tickets were logged with the courts and counted as police statistics, but were never handed out.

Currently, there are several Hamilton Police officers on paid suspension. Some of the known include:

  • Det. Cons. Craig Ruthowsky is in policy custody after being denied bail following charges related to a Toronto Police gang investigation, Project Pharaoh. He is charged in connection with cocaine trafficking, breach of trust and participating in a gang, among others. His charges stem from actions he allegedly took while under suspension for a similar charge, some three years earlier.
  • Cons. Robert Hansen was arrested and charged along side Ruthowsky in 2012, when he was then-described as a 12-year veteran of the force who was charged with fabricating evidence and perjury.
  • Cons. Don Sauve, of Caledonia, is a 15-year veteran of the force who is awaiting Police Act charges after having his criminal charges withdrawn.
  • Cons. Paul Manning was arrested and charged for allegedly sending a threatening e-mail. When he was arrested, police found a firearm not stored safely, which led to additional charges.
  • Sgt. Jason Howard is awaiting Police Act hearing, stemming from allegations of fraudulent submissions of benefit claims.

Five of the seven ACTION team officers have been named by police. The charged five include:

  • Const. Bhupesh Gulati, 31: conspiracy to commit an indictable offence, namely intent to mislead by fabricating provincial offences notes; four counts of fabricating evidence; four counts of breach of trust.
  • Const. Shawn Smith, 37: conspiracy to commit an indictable offence, eight counts of fabricating evidence, eight counts of breach of trust and obstructing police.
  • Const. Steve Travale, 40: conspiracy to commit an indictable offence, seven counts of fabricating evidence, seven counts of breach of trust.
  • Const. Staci Tyldesley, 29: conspiracy to commit an indictable offence, 10 counts of fabricating evidence, 10 counts of breach of trust.
  • Const. Dan Williams, 32: conspiracy to commit an indictable offence, two counts of fabricating evidence, two counts of breach of trust.