Equifax, the credit reporting company, has been ordered to pay a settlement of $725,000 after a coding error led to inaccurate credit scores being reported, adversely affecting tens of thousands of consumers in New York. According to the New York Attorney General's office, these errors occurred between March and April 2022, causing consumers to face higher costs for loans and other financial products.
“Credit scores affect some of the most significant parts of New Yorkers’ lives, from the cars they can buy, to the housing they live in, to their ability to start a small business,” New York Attorney General Letitia James said, highlighting the gravity of the situation where a vital financial indicator was compromised, Equifax's pivotal role in consumers’ lives was underscored by the AG, and this breach in the reporting process led to inflated costs for affected consumers, the settlement, beyond offering restitution, will also enforce Equifax to implement additional safeguards to prevent future discrepancies.
The settlement with Equifax not only seeks to address the financial discrepancy but also mandates the implementation of new safeguards designed to ensure the future accuracy of consumer credit reporting. Consumer reports containing errors were distributed to lenders for approximately three weeks before the issue was corrected by April 8, 2022. More than 77,000 New Yorkers are estimated to have been affected by the erroneous calculations of their credit scores.
In response to the discovery, Equifax alerted the lenders and insurers that were potentially impacted by this misreported data and offered to reimburse them so that they can adjust interest rates and premiums to the fair amounts consumers would have qualified for, with this step dozens of lenders and insurers have taken action to provide remediation to the wronged consumers and have subsequently been reimbursed by Equifax for the costs. In addition, Equifax sold credit score products directly to consumers during the period of inaccuracy, those affected will be contacted for restitution by the OAG, the Office of the Attorney General has put forth resources for consumers to file complaints about credit report issues they may encounter.
This case was handled by individuals within the Consumer Frauds and Protection Bureau, which is part of the Division of Economic Justice. New Yorkers with grievances related to credit rating agencies are encouraged to reach out to the OAG's Consumer Frauds and Protection Bureau online or by calling 1 (800) 771-7755 for assistance.
