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Equifax Fined $15M For Inaccurate Credit Scores, Mishandling Disputes: Cfpb

One of the nation’s largest credit reporting agencies has been fined $15 million for issuing inaccurate credit scores and failing to properly investigate consumer disputes, officials said.

Equifax corporate headquarters in Atlanta, GA.

Equifax corporate headquarters in Atlanta, GA.

Photo Credit: Wikimedia Commons - Tyler Lahti

Equifax will pay the fine into the Consumer Financial Protection Bureau's victims relief fund, the federal agency said in a news release on Friday, Jan. 17. The CFPB's investigation found Equifax ignored critical evidence submitted by consumers disputing inaccuracies in their credit reports.

According to the CFPB, Equifax also allowed deleted errors to resurface and relied on flawed systems that caused incorrect scores for hundreds of thousands of Americans.

"Equifax failed in its basic duty to investigate and resolve consumer disputes about inaccurate information on their credit reports," said CFPB Director Rohit Chopra. "Today’s order requires Equifax to pay a civil penalty and follow federal laws on handling credit reporting disputes."

Headquartered in Atlanta, Georgia, Equifax processes about 765,000 consumer disputes each month and provides credit reports to lenders, landlords, and employers. These reports can impact loan approvals, insurance rates, and housing opportunities.

The CFPB said Equifax violated the Fair Credit Reporting Act, which mandates that credit reporting agencies investigate disputed information and ensure credit report accuracy. The company was accused of failing to consider evidence consumers submitted in disputes.

One critical issue involved flawed software coding that led to miscalculated credit scores for hundreds of thousands of consumers. In some cases, Equifax issued letters with contradictory information, confusing consumers about whether disputes were resolved.

Equifax was also accused of reintroducing previously deleted errors into credit reports. Federal regulators said the credit reporting agency shared inaccurate scores and duplicate account information with lenders, along with blocking identity theft-related information from being corrected.

The CFPB fine was announced two days after Equifax agreed to pay a $725,000 settlement in New York. Attorney General Letitia James said a coding error wrongly lowered credit scores for more than 77,000 New Yorkers.

Experts say you should monitor your credit score and run a check at least once a year. The Federal Trade Commission also recommends checking your score before applying for credit or a loan.

Anyone experiencing issues with Equifax or other credit reporting agencies can submit complaints on the CFPB’s website or by calling 855-411-CFPB (2372).

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