Clarity Services Inc., a credit reporting company specializing in the subprime segment, reached a consent order with the Consumer Financial Protection Bureau that includes an $8 million penalty.
The company and Chief Executive Tim Ranney agreed to change how Clarity obtains and sells consumer credit reports, and how it handles consumer complaints, the CFPB said on Dec. 3.
In the consent order, Clarity neither admitted nor denied CFPB accusations. “While we do not agree with the CFPB’s allegations, the settlement allows Clarity Services to move beyond this distraction,” Ranney said last week in a written statement.
Starting last year, the CFPB has cited several auto lenders for alleged violations of rules governing “furnishers” that collect consumer credit histories and furnish that data to credit bureaus. But Clarity’s consent order addressed different aspects of handling consumer credit histories.
The CFPB cited Clarity for allegedly pulling consumer credit histories from credit bureaus without a valid reason. In turn, those credit pulls showed up on the consumers’ credit histories, which could have had an adverse effect on their credit scores.
Clarity, based in Clearwater, Fla., provides auto lenders with data on individual consumers, such as stability of an applicant’s reported income, housing and employment, and identity verification, according to the company website.
