WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) has issued Xerox Business Services LLC, now Conduent Business Services, a $1.1 million civil penalty for its failed software, which allegedly led to incorrect consumer information being sent to credit reporting agencies.
The CFPB filed a consent order against Xerox and fined the company for flawed software that allegedly caused more than 1 million borrowers' consumer information to be mistakenly sent to credit reporting agencies.
"Xerox provided flawed software that resulted in incorrect or incomplete credit reporting information on more than a million borrowers," said then CFPB Director Richard Cordray said in a news release. "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."
According to the CFPB, Xerox used a third party software application for five auto lenders, which automatically generated and transmitted borrowers' auto loan information to consumer reporting credit agencies. The incorrect reporting could cause consumers to be denied credit or not qualify for more favorable credit terms. In addition, the mistake could affect qualifying for employment, insurance or rentals.
The CFPB has filed a consent order and is requiring Xerox to explain its errors to clients, prevent future mistakes, provide the CFPB with a compliance plan and pay the $1.1 million penalty to the CFPB civil penalty fund.