WASHINGTON–The CFPB has assessed a $1.1-million civil money penalty against Xerox Business Services, LLC, now called Conduent Business Services, for software errors that led to incorrect consumer information about more than one million borrowers being sent to credit reporting agencies.
The agency said the company also failed to notify all of its auto lender clients about known flaws in its software that led to the errors. The CFPB order further requires the company to fix its faulty software.
"Xerox 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 credit reports can greatly harm consumers, so we are ordering Xerox to fix its flawed systems.”
According to the CFPB, Dallas-based Xerox Business Services operated and customized a third-party software application for five auto lenders. The software automatically generated and transmitted information about borrowers’ auto loans to consumer reporting agencies.
“Mistakes on credit reports like those caused by Xerox can lead to consumers being denied credit, or not qualifying for lower interest rates or other favorable credit terms. Errors on credit reports can also impact a consumer’s ability to qualify for employment, insurance, and rental opportunities,” the CFPB said. “Widespread defects in the loan-servicing software that Xerox used led lenders to report inaccurate information about consumers’ performance on their loans. In 2016, its reports for more than one million of the auto lenders’ 6.4 million customer accounts had one or more errors.”
The consent order is available here: http://files.consumerfinance.gov/f/documents/cfpb_conduent-business-services_consent-order_112017.pdf