Jonathan Kolodziej Quoted in Law360 on CFPB’s Newest Enforcement Target and Aggressive Approach to Repeat Offenders


Media Mention

Bradley partner Jonathan Kolodziej was quoted in Law360 about the Consumer Financial Protection Bureau’s (CFPB) aggressive enforcement approach to reining in alleged corporate recidivists.

CFPB Director Rohit Chopra is taking on his biggest target so far with the agency’s new lawsuit against TransUnion, which accuses TransUnion of violating commitments it made in a 2017 consent order to stop baiting consumers into signing up for credit monitoring subscriptions with allegedly deceptive online offers of free or low-cost access to their credit scores and reports. The suit – which names the Chicago-based TransUnion, two subsidiaries and a former senior executive as defendants – was filed just two weeks after Chopra gave a buzzed-about speech describing companies that violate previous court or agency orders as “the worst type of repeat offender” and arguing that regulators must pursue claims against individual executives to hold them accountable.

This approach of going after corporate top brass appears to be making its formal debut with the TransUnion case, which concerns not only the company’s alleged violations of an earlier consent order but also names John Danaher, a longtime executive who retired from the company earlier this year, as partly responsible.

While Danaher’s attorneys have said the CFPB’s claims against him are “without merit,” his inclusion in the case is nevertheless “very significant,” according to Kolodziej.

“Although we have seen individuals be named in other CFPB actions, I don't believe it has ever happened with an executive of a large institution,” Kolodziej said. “The CFPB is going to continue making bold pronouncements about financial services companies and its policy objectives,” he explained. “We have seen other areas where the bureau is effectuating policy change through public statements and initiatives, and this likely is also an effort to put the industry on notice.”

But what might make some companies sit up and take note wasn’t in the CFPB’s complaint at all. Instead, it was the way Chopra described TransUnion’s allegedly shady tactics, as “digital dark patterns,” a term that refers to website and software design choices that are meant to manipulate consumers. Until now, the term has mainly been used by the Federal Trade Commission (FTC), which warned firms as recently as last fall that they could face enforcement action if they deploy illegal “dark patterns” to rope consumers into subscription services.

Chopra, who previously served as an FTC commissioner, appears to be importing this language into the lexicon of the CFPB, heralding a new potential area of emphasis for the agency’s oversight of the increasingly tech-heavy consumer financial services marketplace.

“The concept of ‘digital dark patterns’ is not new, but it is new coming from the CFPB,” explained Kolodziej. “I expect that we will continue to see this concept coming up, particularly when the bureau is making allegations of deceptive acts or practices in connection with websites, mobile applications or other electronic interfaces,” he added.

The complete article, “CFPB’s Chopra Throws Down Marker With TransUnion Case,” was published by Law360 on April 19, 2022. (login required)