Company Failed to Inform Auto Lenders That Defects in its Software Led to Inaccuracies
Washington, D.C. —(ENEWSPF)—November 22, 2017
By: Rosemary Piser
The Consumer Financial Protection Bureau (CFPB) took action this week against Xerox Business Services, LLC, now called Conduent Business Services, for software errors that caused erroneous consumer information about more than one million borrowers being sent to credit reporting agencies. In addition, the company failed to notify all of its auto lender clients about the known flaws in its software that led to the errors. The consent order requires Xerox to pay a $1.1 million civil penalty, explain its mistakes to its lender clients, and fix its faulty software.
Richard Corday, CFPB Director said, “Xerox provided flawed software that resulted in incorrect or incomplete credit reporting information on more than a million borrowers.The company compounded the problem by keeping lenders in the dark about the defects. Mistakes on credit reports can greatly harm consumers, so we are ordering Xerox to fix its flawed systems.”
Enforcement Action
The Dodd-Frank Wall Street Reform and Consumer Protection Act, authorizes the CFPB to take action against institutions engaged in unfair, deceptive, or abusive acts or practices, or that otherwise violate federal consumer financial laws. Under the terms of the consent order, Xerox must:
- Explain the errors to its clients, and act to prevent future mistakes: Xerox has to describe the errors caused by its flawed software to its client auto lenders, inform lenders of any future potential or actual errors within 30 days of its discovery, and explain the correct use of the software to its clients each time the coding is revised.
- Give the CFPB a compliance plan: Xerox must give the CFPB a plan showing that it will identify and fix all defects in its software, and ensure that the software will report accurate information to credit reporting agencies.
- Pay a $1.1 million penalty: Xerox must pay a penalty of $1.1 million to the CFPB Civil Penalty Fund.
The consent order is available here.
About the Consumer Financial Protection Bureau (CFPB)
The CFPB is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
Source: www.consumerfinance.gov
