Influence > Litigation > FICO vs. VantageScore
FICO vows to appeal VantageScore case
District Court in midwest rules against Fair Isaac (maybe they should have stayed in California)
Press release: "VantageScore Solutions Scores Complete Legal Victory over FICO"
“This is a clear victory for VantageScore and others in the credit scoring industry, including
lenders,” said Barrett Burns, VantageScore Solutions President and Chief Executive Officer.
“More important, this decision is a victory for consumers, who will continue to benefit from
choice and competition in the credit scoring marketplace.”
Meanwhile, VantageScore claims that it is "The New Standard in Credit Scoring," but court documents put its market share at 5.7%:
"As Defendants emphasize, VantageScore has been on the market for three years and has garnered only 5.7% of the credit scoring market while Fair Isaac’s dominant position has experienced very little change."
MEMORANDUM OPINION AND ORDER, 7/24/09, Fair Isaac Corp. v. Experian, et al.
FICO (Fair Isaac)
Press release: "FICO to Appeal Verdict in Continuing Effort to Bring Clarity and Fairness to Consumer 'Credit Score' Advertisements"
"FICO has long maintained that advertising and other tactics used by Experian, TransUnion and VantageScore Solutions deliberately confuse consumers into purchasing their credit scores under the false belief that they are FICO scores, or that the scores they buy from these companies are used by their lenders to make credit decisions – neither of which is the case... FICO believes strongly in the merits of each of its claims, including that VantageScore remains an illegal presence in the market."
Here's the thing:
300-850 --> FICO score scale
300-850 --> TransUnion TransRisk New Account score scale
Also, Experian sells its PLUS score by saying, "Know your score before you apply for credit – you may save money," while providing the disclaimer: "The PLUS Score is derived from information based on a credit report, using a similar formula to those used by lenders."
See Fake-O FICO Funk.
Meanwhile, FICO says that the average credit score is in the mid 600s, and that a score of 707 is below average.
TransUnion (fka Trans Union)
Press release: "Federal Court Supports TransUnion and VantageScore - Consumer Choice Preserved"
"FICO claimed a common law trademark in the range which it registered with the U.S. government in 2006,[SIC] TransUnion has used the 300-850 range for a proprietary credit scoring model it first made available to the consumer market in 2003, a date that precedes FICO's original 2004 trademark application."
That's just great. TransUnion wantonly markets a score to consumers with exactly the same scale as the FICO, then uses trademark law as an excuse to do so. It is a fabulous, brilliant and ingenious legal move by TransUnion— and a horrible defeat for unknowing consumers.
By far (as usual), the British provide the best comedy in their response to the jury's decision.
Press release: "Experian Prevails in Lawsuit Brought by FICO - Verdict Protects Consumer Choice in Credit Scoring"
“'Today’s verdict is a victory for Experian and for American consumers,' said Kerry Williams, group president of credit services and decision analytics at Experian. 'By preventing FICO from further stifling competition in the marketplace, the jury’s decision will increase consumer choice in credit scoring.'”
However, nothing protects your choice to get your genuine FICO score used by lenders and controlled by Experian. Experian, itself, blocked it. So, as Experian speaks for you, American Consumer, are you victorious? Maybe you should get a jury, too. Or, better yet, how about an act of Congress?
In response to Experian's move to black-out your FICO score (while continuing to sell it to lenders, of course), the U.S. House of Representatives passed a bill that addresses it. The author even singled-out the agency for a drubbing.
USA Today reports the whining: "Steven Wagner, president of consumer information services at Experian, says the firm nixed its partnership with Fair Isaac to sell the scores to consumers because Fair Isaac was 'simply unreasonable' in negotiating a separate contract."
But, somehow, the other two credit bureaus of VantageScore's "Project Trident" continue to cooperate with FICO.
Other Experian embarrassments:
Their little war continues while the bureaus play with your options like expendable chess pieces.