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The CFPB on Thursday said Experian and its subsidiaries have deceived consumers about the use of credit scores it sold to them. It ordered the company to pay a civil penalty of $3 million and to truthfully represent how its credit scores are used.

Experian claimed the credit scores it marketed and provided to consumers were used by lenders to make credit decisions. The CFPB found that lenders did not use Experian's scores to make those decisions.

Based in Costa Mesa, Calif., Experian is one of the nation's three largest credit reporting agencies. In addition to the credit scores that are actually used by lenders, the CFPB said several companies have developed "educational credit scores," which lenders rarely, if ever, use and are only intended to inform consumers.

The CFPB explained that Experian developed its own proprietary credit scoring model meant for educational purposes and not used by lenders for credit decisions. From at least 2012 through 2014, the bureau found that Experian violated the Dodd-Frank Act by deceiving consumers about the use of the credit scores it sold.

In its advertising, Experian falsely represented that the credit scores it marketed and provided to consumers were the same scores lenders use to make credit decisions. The CFPB found that in some instances, there were significant differences between the educational scores offered by Experian and the scores lenders actually used.

Experian also violated the Fair Credit Reporting Act. A credit reporting company must provide a free credit report once every 12 months through a central source – AnnualCreditReport.com – where consumers can obtain their reports. Until March 2014, consumers getting their reports through Experian had to view Experian advertisements before they got to the reports – a violation of FCRA.

The full text of the CFPB's consent order against Experian is available here.