Dive Brief:

• The Federal Trade Commission (FTC) finalized an order against Dun & Bradstreet Holdings, a provider of credit report services, for allegedly deceiving businesses about the value of its products and failing to correct errors in its reports.
• “Many businesses have complained of errors in these reports that have cost them time, expense and opportunities,” the FTC said Thursday in a statement. Dun & Bradstreet “failed to give these businesses a clear, consistent and reliable process to get these errors fixed.”
• Dun & Bradstreet “profited from businesses’ pain by selling them a line of products that purported to help them improve their reports,” the FTC said. “In fact, for many businesses these benefits proved illusory.” Dun & Bradstreet did not respond to a request for comment.

Dive Insight:

The importance of credit reports to CFOs, while always significant, may grow in coming months as the first pullback in accommodation by the Federal Reserve since 2018 increases borrowing costs.

Fed officials indicated that they may raise the main interest rate by a half percentage point at their May 3-4 meeting and start trimming their $9 trillion asset portfolio, according to minutes of their March meeting released Wednesday.

Policymakers during the meeting cited the worst inflation in four decades and raised the federal funds rate by a quarter point, withdrawing record stimulus rolled out at the start of the pandemic in early 2020.

The policy reversal away from easy money has complicated capital-raising plans by some CFOs by pushing up the yield on the benchmark 10-year Treasury note to 2.7% — a full-percentage-point jump since March 4.

Dun & Bradstreet is central to efforts by some CFOs to raise capital, the FTC said.

The company’s credit reports, ratings and scores “are often key factors in whether and on what terms businesses will extend credit or award contracts to other businesses,” the FTC said. The company’s reports “can be vitally important to many small- and mid-sized businesses.”

The FTC ordered Dun & Bradstreet to refund businesses harmed by deception in the sale of its CreditBuilder products, which the company says help customers monitor and manage credit scores and ratings.
The FTC also ordered Dun & Bradstreet to either delete or reinvestigate information that companies say is inaccurate and meet a deadline in the correction of errors.

The company must refund businesses that first bought CreditBuilder subscriptions between April 2015 and May 2020, and allow “many current customers to cancel their services and obtain refunds,” the FTC said. The commission approved the order in a 4-0 vote.