November 22, 2017
Now known as Conduent Business Services, the company has incurred a hefty fine of $1.1 million from the Consumer Finance Protection Bureau.
PYMNTS reported on the story, revealing that the fine “was assessed for software efforts that led to incorrect and damaging consumer information being fed to the credit reporting agencies for over one million people.”
Conduent incurred the fine, not for the mistakes, but because when it was investigated by the CFPB, the Bureau discovered that Xerox/Conduent had known there problems “but failed to notify all of its auto lender clients” about them.
“Xerox Business Services provided flawed software that resulted in incorrect or incomplete credit reporting information on more than a million borrowers,” said CFPB Director Richard Cordray. “The company compounded the problem by keeping lenders in the dark about the defects. Mistakes on a credit report can greatly harm consumers, so we are ordering Xerox to fix its flawed systems.”
The problem “appears to have originated in an automation function that was responsible for transmitting information about borrowers’ auto loans to credit reporting agencies”, an issue which Xerox “compounded” by not revealing the error to its client lenders, despite knowing it was both “serious and widespread.”
In addition, Xerox “failed to pass along information it learned from the software’s developer about upgrades needed to prevent mistakes” and because of this, Xerox clients “persisted in transmitting inaccurate and incomplete information about borrowers and their accounts to the credit reporting agencies.”
The CFPB has issued an order to Conduent Business Services to “explain the errors it made” to the company’s clients and “explain the correct use of their software […] going forward.”
Categories : Around the Industry