Equifax Settles Pennsylvania Coding Error Case for $485,000: Impact on Consumers and Industry

Introduction:

Pennsylvania Attorney General Michelle Henry recently announced a landmark settlement with Equifax, the Georgia-based credit reporting agency, amounting to $485,000. The agreement stems from a coding error in 2022 that resulted in inaccurate reports to lenders, ultimately impacting tens of thousands of consumers. This development underscores the critical importance of accuracy in consumer reporting and highlights the consequences of lapses in data integrity.

Credit Error Impact and Consumer Fallout:

During a three-week period in 2022, a coding error at Equifax led to adverse score shifts for approximately 51,000 Pennsylvania residents, causing heightened loan and insurance costs. Attorney General Henry emphasized the magnitude of Equifax’s role as a major consumer reporting agency and the corresponding responsibility to furnish accurate information to consumers and lenders. The settlement aims to hold Equifax accountable for its failure to fulfill this fundamental duty and seeks restitution for affected consumers.

Penalties and Settlement Terms:

Equifax faces a penalty of $470,000 to be remitted to the Pennsylvania Treasury, along with an additional $15,000 allocated to the Office of the Attorney General. This substantial penalty reflects the severity of the coding error and its repercussions on consumers. The company has also committed to reimbursing lenders for any interest rate adjustments necessitated by the error, with ongoing reimbursements extended as part of the settlement. Consumers impacted by the adverse score shifts have until December 31 to request reimbursement from Equifax.

Legal Context and Precedent:

Notably, this settlement marks the largest penalty imposed in a consumer finance case by the Attorney General’s office since 2010, highlighting the gravity of Equifax’s regulatory breach. The company’s prior settlement with the Attorney General’s office in 2019 following a major data breach underscores the recurrent challenges in safeguarding consumer data and upholding regulatory compliance. Nicholas Smyth, assistant director for consumer financial protection, filed the settlement in the Philadelphia Court of Common Pleas, signaling a proactive stance in enforcing consumer protection measures.

Conclusion:

The Equifax settlement serves as a significant milestone in addressing the fallout from the 2022 coding error, emphasizing the pivotal role of regulatory oversight in safeguarding consumer interests. As Equifax endeavors to rectify its lapse and mitigate the impact on affected consumers, this case underscores the ongoing imperative for rigorous data governance and compliance within the consumer reporting industry. Moving forward, stakeholders must remain vigilant in upholding transparency, accuracy, and accountability to foster trust and resilience in the financial ecosystem.

The Adkins Firm Helps Consumers with Credit Errors

The Adkins Firm represents consumers who have errors on credit, employment background and tenant screening reports. We help our clients clear their names. Do you have errors on a credit report, background report or tenant screening report due to fraud?  Have you disputed the error and the fraudulent information was verified that it belongs to you? If you answered yes, then you may have a claim under the federal Fair Credit Reporting Act. Please note, there is a statute of limitations that may bar you from recovering for your damages. Don’t wait.  Contact us for a free case review.