Class Action Alleges Fair Isaac Corporation’s Anticompetitive Conduct Discouraged Adoption of Credit Score Alternative for Business Purchasers of FICO Credit Scores

Kehoe Law Firm, P.C. is making business owners aware that on April 2, 2020, a class action lawsuit was filed in United States District Court, Northern District of Illinois, against Fair Isaac Corporation on behalf of “B2B Purchasers” of a FICO B2B Credit Score from Fair Isaac and/or a Credit Bureau. 

The lawsuit “concerns the B2B Credit Score Market, over which Defendant Fair Isaac has unlawfully maintained a 90% monopoly for many years.”  According to the complaint, “Fair Isaac has abused its monopoly power by engaging in anticompetitive and exclusionary conduct and agreements. Fair Isaac has suppressed competition, stymied innovation, and limited access to credit for millions of Americans – all in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§1 & 2, as well as numerous state antitrust and unfair trade practices laws.” [Emphasis added.]

Alleged Pattern of Anticompetitive Conduct To Discourage Adoption of VantageScore Credit Score Alternative 

The antitrust class action complaint alleges that

[r]ather than compete on the merits with VantageScore, Fair Isaac has engaged in a pattern of anticompetitive conduct over the course of more than a decade to discourage the adoption of VantageScore and preserve its own monopoly, with the Credit Bureaus’ [i.e., TransUnion, Experian, and Equifax] assistance. Fair Isaac has abused its monopoly power to prevent the Credit Bureaus from successfully marketing and selling a competitive alternative to FICO Scores and has waged a disparaging public relations and advertising campaign to create fear, uncertainty, and doubt about VantageScore’s viability and reliability with lenders and consumers.

Through its exclusionary conduct, Fair Isaac has succeeded in preventing the substantial sales growth that VantageScore or a competing credit scoring system would have achieved though competition on the merits. Having suppressed competition, Fair Isaac has been able to significantly increase prices, including most recently in September 2019, for its FICO Scores. But for Fair Isaac’s suppression of competition and the resulting contractual agreements not to compete, VantageScore or another competitive credit scoring system would have thrived and won substantial market share through its innovative product and would have reduced the prices paid for B2B Credit Scores by Plaintiff and members of the Class.

Fair Isaac’s anticompetitive and exclusionary conduct has harmed businesses that have been deprived of competitive pricing for instruments to allow them to gauge credit risk and have had their freedom of choice restricted. Opening the market to competition is essential to competitive pricing and product innovation, including scoring the tens of millions of creditworthy Americans who have been denied access to credit. [Emphasis added]

If you are a lender, financial institution or other business (i.e., a “B2B Purchaser,”) that purchased a FICO B2B Credit Score from Fair Isaac or a Credit Bureau, you are encouraged to contact Kehoe Law Firm, P.C. to discuss potential legal claims.
Kehoe Law Firm, P.C.