Clarity Services Inc., a Clearwater, Fla., subprime credit reporting agency, agreed to pay $8 million in a consent order with the U.S. Consumer Financial Protection Bureau, which said the company illegally obtained consumer reports.
Clarity and its CEO, Tim Ranney, were found by the CFPB to have violated the Fair Credit Reporting Act by obtaining thousands of consumer reports without permission and by failing to look into consumer credit reporting disputes. The Fair Credit act requires a “permissible purpose” to obtain access to consumer reports.
“While we do not agree with the CFPB’s allegations, the settlement allows Clarity Services to move beyond this distraction,” Ranney said in a statement.
Clarity, which calls itself the “credit bureau for middle America,” provides information on subprime consumers to credit providers. Its website lists auto finance as one of the “markets we serve,” along with check cashers, credit cards, communications, collections, “small dollar” and financial.
“Obtain greater visibility on your applicants with Clarity’s credit reporting solutions for auto loan providers,” the site says. “Our real-time data offers an unparalleled view into a consumer’s financial records, including their banking behavior, loan history, their fraud potential, and more.”
The CFPB consent order requires Clarity to pay the $8 million fine, end its “illegal credit reporting practices,” investigate consumer disputes and implement “consumer safeguards.”
The CFPB said in the consent order that Clarity and Ranney have illegally obtained consumer reports since 2011 for use in marketing.
“Clarity and its owner mishandled important consumer information and failed to take appropriate action to investigate consumer disputes,” CFPB Director Richard Cordray said in a statement. “Today, we are holding them accountable for cleaning up the way they do business.”