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CFPB Terminates 2023 Consent Order Against a National Consumer Reporting Agency for Alleged Security Freeze Violations

By A.J. Dhaliwal, Mehul Madia & Maxwell Earp-Thomas on November 13, 2025
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On November 3, 2025, the Consumer Financial Protection Bureau terminated its 2023 consent order against a national consumer reporting agency. The original order, issued in October 2023, required more than three million dollars in consumer redress and a five million dollar civil money penalty and addressed alleged violations of the Consumer Financial Protection Act, the Fair Credit Reporting Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act.

The 2023 order had alleged that the company failed to timely place or remove security freezes and proprietary lock features, inaccurately told consumers that their requests had been processed, did not extend prescreen opt out protections for certain consumers with extended fraud alerts or active duty alerts, and relied on a mail vendor that processed freeze requests outside statutory timelines. The Bureau also alleged that underlying system defects allowed freeze and lock statuses to become misaligned across internal databases, resulting in delayed or ineffective consumer protections.

In terminating the order, the Bureau explained that the company had completed required redress payments, satisfied the civil money penalty, and implemented the injunctive requirements intended to prevent recurrence of the alleged issues. The Bureau noted that the entity had taken steps to address system driven risks associated with freeze and lock processing, enhance oversight of third party vendors handling mailed requests, and improve controls tied to prescreen suppression for consumers with heightened identity theft protections. Acting under its authority to modify or terminate administrative orders, the Bureau stated that the order could be closed and that any alleged noncompliance with the order’s terms would be waived.

Putting It Into Practice: The Bureau has been active this year in terminating consent orders issued during prior administrations as entities complete remediation and demonstrate sustained compliance (previously discussed here, here, and here). As the regulatory landscape continues to evolve, firms should stay alert to future actions and ensure their compliance programs remain adaptable.

Photo of A.J. Dhaliwal A.J. Dhaliwal

A.J. is a partner in the Finance and Bankruptcy Practice Group in the firm’s Washington, D.C. office.

Read more about A.J. DhaliwalEmail
Photo of Mehul Madia Mehul Madia

Mehul Madia, special counsel in the firm’s Washington, D.C. office, provides deep consumer finance and fintech expertise to clients, leveraging more than 15 years’ of public and private sector experience.

Read more about Mehul MadiaEmail
Photo of Maxwell Earp-Thomas Maxwell Earp-Thomas

Max is an associate in the Finance & Bankruptcy Practice Group in the firm’s Orange County office.

Read more about Maxwell Earp-ThomasEmail
  • Posted in:
    Banking, Finance and Securities, Privacy and Cybersecurity
  • Blog:
    Consumer Finance and Fintech Blog
  • Organization:
    Sheppard, Mullin, Richter & Hampton LLP
  • Article: View Original Source

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