A lawsuit filed last week against Equifax in federal court alleges that the company’s mistakes on millions of credit scores hurt consumers and violated the law.
The suit, which seeks class-action status, asks that Equifax be forced to pay back the money it made selling those scores, pay an unspecified amount in penalties and to inform every individual whose scores were misreported.
“This lawsuit alleges that Equifax failed to live up to its responsibility as one of America’s major credit reporting agencies,” said a statement by Morgan & Morgan attorneys John Morgan and John Yanchunis. “We believe that many of the people impacted – some of whom may still be unaware of what happened – suffered severe financial consequences. We will hold Equifax accountable for these alleged failures and win justice for everyone impacted.”
The case, filed Tuesday on behalf of a Florida woman in U.S. District Court in Atlanta, could be the first legal fall-out from the credit score revelations, which was first reported by trade publication National Mortgage Professional in May, but occurred in late March and early April.
Atlanta-based Equifax, which acknowledged making mistakes on many consumers’ scores during a three-week period in March and April, has said that a “coding issue” was at fault.
The company collects information about hundreds of millions of individuals and companies, files that show whether someone is applying for debt and whether they generally pay their debts on time. Equifax, like other credit-gathering companies, sells that data to lenders, who use the reports and credit scores in deciding whether to offer a loan and what kind of interest to charge.
The Wall Street Journal recently reported that millions of consumer scores were affected.
Equifax told The Atlanta Journal-Constitution it will respond in detail to the suit in court.
However, the company said in a statement Thursday that the “vast majority of scores” were not changed by the purported software glitch.
Moreover, a change in the score would not necessarily mean that a consumer was denied a loan or made to pay higher interest rate, the company said.
“For those consumers that did experience a score shift, initial analysis indicates that only a small number of them may have received a different credit decision,” the company said.
The suit alleges that some people were harmed. In its filing, Morgan & Morgan asks the court for the right to represent all the people whose credit scores were changed. Those people’s identities are, for the most part, unknown and their number also uncertain.
However, as representative of that larger class, the lawyers cite Nydia Jenkins of Jacksonville who, they say, was denied an auto loan because of a mistake in an Equifax report to a dealership. Equifax reported to the dealership that Jenkins score was off by 130 points, the suit says.
Jenkins was forced accept a loan with much less generous terms, paying $150 a month more than she would have paid under the application she was denied, according to the suit.
Along with TransUnion and Experian, Equifax is one of three dominant credit-reporting companies that sell information about American consumers, mainly to lenders. Equifax may be the best known, thanks to a hack in 2017 that exposed sensitive personal information about nearly 150 million Americans.
That 2017 breach, one of the largest hacks known into consumer data, catapulted the once-obscure Equifax into national notoriety. It led to the departure of the company’s top executive, Congressional hearings and a settlement in which the company paid hundreds of millions of dollars.
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