FTC says Dun & Bradstreet defrauded small businesses on service, pricing

Small businesses, the FTC is on your side. Dun & Bradstreet took large sums of money from small businesses and promised to improve their credit reports, but benefited from Dun & Bradstreet’s D&B) The main player in expensive services is Dun & Bradstreet itself.

The FTC alleges that Dun & Bradstreet deceived companies about the purported benefits of its CreditBuilder line of products; used deceptive auto-renewal practices, including moving customers to more expensive service tiers without explicit notice; and reported business credit Reporting inaccurate information without providing a reasonable error-remediation process. The proposed settlement would require the company to refund many customers and change its practices to help ensure D&B appropriately responds to all business complaints about misinformation in its D&B reports.

For years, the Federal Trade Commission has warned consumers that credit report errors or payment histories that are not accurately reported can cause harm. This applies to businesses as well, especially considering that Dun & Bradstreet maintains more than 300 million business credit reports worldwide. Even according to Dun & Bradstreet, an inaccurate (or incomplete) Dun & Bradstreet credit report can impact a company’s ability to attract new customers, increase cash flow, negotiate better contract terms with suppliers and other businesses, and improve its financial health. ability. Therefore, errors on a business’s credit report—even errors in the business’s name, address, and other basic information—can have serious consequences for a small business.

The complaint alleges that Dun & Bradstreet used deceptive claims in a variety of ways to market its products. D&B’s Promise is an example of how small businesses can easily add payment experience information to their reports. If a business discovers inaccurate or incomplete payment information in a D&B report, there is only one place to turn: to Dun & Bradstreet itself. How did Dun and Bradstreet react? It typically markets its line of CreditBuilder services, including what D&B describes as a “self-credit” product that it says allows small businesses to add their payment history information to their own credit reports.

You may want to read the complaints for the inside story of what Dun & Bradstreet does, but it boils down to this. D&B sells its services by telling small businesses they simply submit the names of the companies it works with, and D&B will contact those companies to verify the small business’s payment history and add the information to its credit report. D&B describes it as “a very simple process”. After getting some additional information from the small business, Dun & Bradstreet said it would “basically take over the rest of the business from there.”

That’s what Dun & Bradstreet promised, but the Federal Trade Commission says that after paying Dun & Bradstreet thousands of dollars for its services, most small businesses got far less than they expected in return. As detailed in the complaint, D&B “did not help subscribers add the payment experience to their credit reports” and “rejected most submissions.” turn out:”[T]Thousands of businesses purchasing these products cannot even add a single payment experience to their credit reports. “

The FTC also said that Dun & Bradstreet marketed CreditBuilder to new businesses, falsely claiming that the business was required to purchase the product so that D&B could conduct background checks and provide the company with a complete Dun & Bradstreet D&B) Credit Report.

The lawsuit alleges Dun & Bradstreet’s mistreatment of small businesses didn’t end there. Just as some companies have misled consumers through deceptive claims and practices related to automatic renewals — practices that the FTC has challenged as illegal — the lawsuit alleges that Dun & Bradstreet targets businesses that use similar tactics. For example, D&B told some customers that at the end of the subscription period, their services would automatically renew and they would be charged “then-current prices.” What Dun & Bradstreet didn’t disclose was that this could lead to significant price increases. In fact, without adequate notice of the change, customers with a $499 annual subscription could end up being charged $1,599 per year for a different product. D&B will charge fees at “current prices” only if it is financially advantageous for D&B. If prices increase, customers will be charged higher prices. If the price drops, the customer is charged the previously higher price. In other words, heads, D&B wins, tails, small businesses lose.

Additionally, the complaint alleges that D&B reported incorrect information on the D&B credit reports of affected businesses without providing them with a reasonable means to dispute the incorrect information, an unfair trade practice that violated the Federal Trade Commission Act”.

Among other things, the proposed settlement would require Dun & Bradstreet to implement far-reaching procedures that would give all businesses the opportunity to challenge inaccurate information in their Dun & Bradstreet credit reports. Under the terms of the order, D&B must investigate complaints of inaccurate reporting by removing the disputed information or conducting a reinvestigation, including considering information submitted by the business in support of its dispute. Re-investigations must also be completed within a specified number of days, depending on the type of information the business disputes. If a review reveals that the disputed information is inaccurate, Dun & Bradstreet must correct it within a specified period—for many of its products, that means within a matter of days. If D&B cannot verify the payment information it reports, it must delete the information and take steps to ensure that the information does not appear in future corporate reports.

In addition, D&B must disclose a number of information in advance about the nature of its services. The proposed order also places restrictions on D&B’s ability to automatically renew CreditBuilder subscriptions, including prohibiting D&B from using automatic renewal to switch subscribers to a different product or to increase the price of the same product without giving clear and detailed notice of a price increase. Charge higher prices and advance information on how to cancel.

The settlement also requires D&B to provide refunds to many businesses that first purchased CreditBuilder products between April 2015 and May 2020, and to give many existing customers the opportunity to cancel their subscriptions and receive refunds. Once the proposed order is published in the Federal Register, the public has 30 days to comment.

What can small businesses learn from this case?

Pause before committing to purchasing a business service. The complaint alleges that Dun & Bradstreet’s sales calls were filled with deceptive claims. One of the best defenses against message (and misinformation) overload is to take your time. Give yourself some time to consider whether an expense makes sense for your company.

Centralize subscription purchases. Whether it’s a long-term supply order or an automatically renewing subscription, keeping your orders in one place is a smart move for your small business. Choose the most discerning person to review your credit card statements each month. They might discover new subscriptions you didn’t approve of or price increases you didn’t authorize.

Consider reviewing your subscription regularly. For consumers and businesses, subscriptions can save time, but only if they provide exactly what your company needs. Evaluate recurring expenses regularly to ensure that the products or services your business signed up for years ago still serve your purposes.

Have you discovered questionable renewal or billing practices? Report to the Federal Trade Commission.