Fair Isaac FICO Credit Score Monopoly Antitrust Class Action

Most adults in the US are aware that they have a FICO score, or three-digit credit rating number. The term “FICO” stands for Fair Isaac Corporation, and the complaint for this class action brings this antitrust suit against the company, alleging that the company has engaged in anticompetitive behavior.

The class for this action is all B2B purchasers living in the US that directly purchased a FICO score from Fair Isaac or a credit bureau, from at least January 1, 2006 until the effects of Fair Isaac’s conduct end.

FICO scores have two main markets: (1) banks and other parties use them to determine whether consumers are likely to be able to pay back loans within the appointed time frame (the B2B market), and (2) consumers want to monitor their own scores (the B2C market). This complaint is about the B2B market.

Fair Isaac dispenses its credit scores through the three major credit reporting agencies, Equifax, Experian, and TransUnion. FICO scores are part of the credit reports they sell. The complaint alleges that “Fair Isaac used the credit reporting agencies and the restrictions in the distribution agreements it entered into with them to implement its multi-pronged anticompetitive scheme.”

Fair Isaac’s agreements with the credit reporting agencies include terms that are designed to maintain its dominance, the complaint alleges. It claims that “Fair Isaac restricts the credit reporting agencies’ abilities to develop or distribute competing credit scores. Fair Isaac also uses its royalty prices for FICO scores to inhibit the credit reporting agencies from bundling a competing score with the FICO score when selling to downstream customers.”

Also, FICO dictates that all three agencies pay the same royalty prices for the scores, preventing any of them from negotiating lower rates that can benefit their customers.

The complaint uses the example of VantageScore Solutions, Inc., “an independent joint venture of the three national credit reporting companies,” which created a competing credit score called VantageScore. The complaint calls it “competitively priced [and] highly predictive[.]”

The complaint alleges, “Indeed, today, by making full use of the credit reporting agencies’ consumer data, including rental and utility payments, VantageScore is capable of providing credit scores to 30 million more Americans than Fair Isaac. If VantageScore were widely adopted by lenders, these creditworthy Americans would have the opportunity to apply for a home mortgage, car loan, or credit card and obtain credit at lower cost.”

The complaint alleges, “Fair Isaac has abused its monopoly power to impose onerous contractual terms on the credit reporting agencies designed to prevent them from successfully marketing and selling VantageScore as an alternative to FICO Scores…”

According to the complaint, the Department of Justice (DOJ) opened an antitrust investigation into Fair Isaac in March 2020.

Article Type: Lawsuit
Topic: Antitrust

Most Recent Case Event

Fair Isaac FICO Credit Score Monopoly Antitrust Complaint

June 9, 2020

Most adults in the US are aware that they have a FICO score, or three-digit credit rating number. The term “FICO” stands for Fair Isaac Corporation, and the complaint for this class action brings this antitrust suit against the company, alleging that the company has engaged in anticompetitive behavior.

Fair Isaac FICO Credit Score Monopoly Antitrust Complaint

Case Event History

Fair Isaac FICO Credit Score Monopoly Antitrust Complaint

June 9, 2020

Most adults in the US are aware that they have a FICO score, or three-digit credit rating number. The term “FICO” stands for Fair Isaac Corporation, and the complaint for this class action brings this antitrust suit against the company, alleging that the company has engaged in anticompetitive behavior.

Fair Isaac FICO Credit Score Monopoly Antitrust Complaint
Tags: Antitrust, Credit Reports