Experian to Pay $650,000 to Settle FTC's Can-Spam Violations
Experian will pay $650,000 to settle charges it sent consumers unsolicited email without offering them a way to opt out, the agency said Monday. “Signing up for a membership doesn’t mean you’re signing up for unwanted email, especially when all you’re trying to do is freeze your credit to protect your identity,” said Samuel Levine, director of the FTC Bureau of Consumer Protection.
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Experian doesn’t provide consumers “clear and conspicuous” notice of their ability to opt out of receiving marketing messages, and a mechanism for them to do so, in violation of the Controlling the Assault of Non-Solicited Pornography and Marketing Act (Can-Spam), said the DOJ’s Monday complaint (docket 8:23-cv-01494) in U.S. District Court for Central California in Santa Ana.
Consumers are required to set up a free membership account as a prerequisite to using certain services Experian offers through its website, said the complaint. Consumers who want to freeze or unfreeze their Experian consumer report online must create an online account -- either a Free Membership account or a Service account -- both of which are free, it said. Setting up either account requires consumers to give Experian their email address.
Experian uses those email addresses to promote products and services including credit card offers, service pitches to improve their credit score, discount offers on auto-related services and products and upsells for its paid memberships, the complaint said. One such service is Experian Boost, which claims it can help consumers raise their FICO credit scores on their Experian credit reports and receive improved credit card offers.
Despite the “clear promotional purpose and content” of its emails, Experian represents that the communications aren’t marketing emails, that they're sent to notify consumers of recent changes to their account and that they contain “important information” about a consumer’s account, the complaint said. The company “sends these emails even to consumers who have specifically opted out” of receiving personalized emails with offers, such as “tips about building credit and managing finances,” it said.
Experian sent numerous “Confirm your car” emails to consumers in 2022, urging them to sign in to confirm their car, said the complaint. The emails don’t include an “unsubscribe” link, it said. “Contrary to what the emails say, they do not “contain … important information about [the recipient’s] account,” and they tell consumers who have previously said they wanted to opt out of marketing messages that Experian “will not honor their request because the message purports to be” an email notification about the recipient’s account, it said.
The primary purpose of the marketing emails is to promote auto-related offers and Experian’s commercial website, the complaint said, but they don’t provide notice of consumers’ ability to opt out of receiving further promotional messages or a mechanism for doing so, it said.
Among consumers’ complaints about the “Confirm your car” emails are that (1) they're unwanted marketing emails; (2) consumers can’t unsubscribe from them; (3) the vehicles referenced appear to be “fake”; (4) the vehicles listed have nothing to do with them, aren't associated with them in any way or are long paid for; (5) the vehicles have nothing to do with their identity, their credit profile or history; (6) they were unable to remove the vehicles from their account without agreeing to share personal information; and (7) they believed inclusion of the cars on their Experian account constituted “incorrect information on their credit record which they wanted and needed to dispute.”
Another email pitches a “Dark Web Scan,” saying it’s “not a marketing email,” but consumers are receiving it to notify them of a “recent change to your account.” Contrary to the text of the email, the message is “a marketing email” and wasn't sent to notify the recipient of a “recent change to [the recipient’s] account,” the complaint said. As with the other emails, recipients are told they can’t opt out of messages because they're “notifications” on the status of their account, the complaint said.
The DOJ asserts claims of failure to provide an opt-out mechanism or a notice of one. It requests injunctive relief, or consumers “will continue to suffer substantial injury” as a result of Experian’s violations of the Can-Spam and the FTC acts, it said. Experian didn’t comment.