Class action lawsuit filed against Equifax for glitch – NMP

Consumer credit information giant Equifax is now the subject of a proposed class action lawsuit related to a coding error that may have led to millions of incorrect credit scores being sent to potential home and auto lenders earlier this year.

The lawsuit, filed last week in federal court in northern Georgia — where Equifax is headquartered — alleges the company’s electronic glitch, which was introduced during a change in technology, caused a drastic and severe change in credit ratings that resulted in consumer rejection. home and auto loans or by paying much higher interest rates.

The lead plaintiff in the case, Nydia Jenkins of Jacksonville, Florida, claimed that Equifax’s error caused her credit score to drop 130 points and resulted in an increase in her monthly payment for a pre-payment auto loan. approved from $350 per month to $504 per month. month.

The complaint alleges that Equifax should have foreseen the harm caused by the problem and that the harm could not be corrected by simply updating the affected credit reports.

The lawsuit also alleges that the company violated its obligations under the Fair Credit Reporting Act and continued to provide inaccurate scores and reports even though it knew or should have known it was inaccurate.

The complaint also alleges that while the company publicly stated that no credit reports were affected, it privately acknowledged that it was.

Accordingly, the prosecution claims that the plaintiffs:

  • Has suffered a loss of use and access to financial accounts and/or credit;
  • Spent money and time to avail of frozen or flagged assets and/or credits due to inaccuracies;
  • Have suffered an alteration in their credit ratings, their ability to borrow and/or their ability to obtain credit;
  • Having suffered a decline in credit ratings resulting from credit inquiries as a result of inaccurate reports provided to lenders;
  • Costs incurred and time wasted in obtaining credit reports to monitor their credit files to try to understand the reasoning behind denials due to the glitch;
  • Lost opportunity costs and lost productivity due to efforts to mitigate and address the adverse effects of error, including, but not limited to, efforts to research how to prevent, detect, challenge, and recover from error ;
  • Has suffered the loss of the ability to control how their personal information is used; and
  • Continue to risk their financial health, which remains subject to further harmful inaccurate reporting until Equifax takes appropriate and legally required steps to protect and ensure the greatest possible accuracy when reporting consumers to the using personal information in its possession.

Equifax officials acknowledged in late May that the error occurred over a three-week period from mid-March to early April and affected about 12% of credit reports sent to mortgage lenders. during this period.

However, the company said at the time that less than 9% experienced a change of 10 points or less; less than 3% experienced a change of 11 to 20 points; and less than 1% experienced a change of more than 20 points.

In a statement last week, company officials said that while they regret the error and take the issue seriously, consumer credit report information has not been affected by the issue. scores have been updated for consumers and lenders, and score changes do not always result in changes to credit decisions.

A company spokeswoman said Monday that as part of Equifax’s commitment to resolving the problem, it conducted an analysis of credit scores used by consumers seeking credit during the time of the problem.

“Our analysis indicates that for these consumers, there was no change in the majority of scores over the three-week period of the issue,” the official said. “For consumers who experienced a score change, initial analysis indicates that only a small number may have received a different credit decision. Although the score may have changed, a score change does not mean necessarily that a consumer’s credit decision has been negatively impacted. Equifax will respond in greater detail in its court filings at the appropriate time.”

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