Experian, one of the world’s largest credit reporting companies, has agreed to pay a $650,000 fine for sending spam emails to its free account users, promoting its paid services without a proper opt-out mechanism.
The spam emails, which were sent between 2016 and 2020, advertised Experian’s paid products, such as credit monitoring, identity theft protection, and credit score improvement. The emails claimed that these products were necessary for users to get important benefits like identity theft protection and access to their full credit reports and scores.
However, the emails did not have a clear and conspicuous way for users to opt out of receiving future emails, which violated the US laws on commercial emails. The CAN-SPAM Act and the FTC Act require that commercial emails have a valid physical postal address of the sender, a clear and accurate subject line, and an easy way for recipients to unsubscribe.
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) sued Experian for its spam email practices and reached a settlement with the company. Experian agreed to pay a $650,000 civil penalty and stop sending spam emails without a proper opt-out mechanism. Experian also agreed to implement a comprehensive compliance program to ensure that its future email marketing practices comply with the law.
However, Experian denied any wrongdoing or liability in the settlement. An Experian spokesperson said: “We are pleased to have resolved this matter. We have always maintained that we did not violate any laws or regulations in connection with our email marketing practices.”
The FTC and the DOJ said that Experian’s spam emails misled consumers who signed up for its free credit monitoring service by telling them they needed to upgrade to paid products to get important benefits. Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection, said: “Experian’s spam emails misled consumers who signed up for its free credit monitoring service by telling them they needed to upgrade to paid products to get important benefits like identity theft protection.”
Acting Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division said: “The Department of Justice is committed to ensuring that companies comply with the CAN-SPAM Act, which requires that consumers be given a meaningful opportunity to opt out of commercial emails.”
Consumer advocates and cybersecurity experts also criticized Experian’s email marketing practices as unfair and irresponsible. They said that Experian took advantage of consumers who wanted to access their free credit reports and scores, and pressured them into buying unnecessary and expensive services. They also said that Experian has a responsibility to protect consumers’ personal and financial information, and to respect their choices and preferences.
Experian is one of the three major credit reporting companies in the US, along with Equifax and TransUnion. It collects and analyzes data on more than one billion people and businesses worldwide. It offers various products and services to consumers, businesses, governments, and nonprofits. It also faces competition from new entrants in the credit reporting industry, such as Credit Karma and NerdWallet.
– Experian slapped by the DoJ for sending spam emails with no opt out, TechSpot, August 25, 2023
– Experian fined $650K over claims of emails with no opt-out, The Register, August 22, 2023
– Experian fined $650K by the FTC and DOJ for spam emails with no opt out – The Verge, The Verge, August 22, 2023
– Experian Consumer Services Faces $650,000 Fine for Spam Emails, PYMNTS.com, August 14, 2023