HARRISBURG, PA — In a landmark settlement, Equifax, one of the nation’s largest consumer credit reporting agencies, has agreed to pay a significant penalty for an error that resulted in incorrect reports to lenders, escalating costs for thousands of Pennsylvanians.
Attorney General Michelle Henry this week announced the settlement, which came about due to an error by Equifax that negatively impacted approximately 51,000 Pennsylvania residents who applied for loans or insurance. The mistake led to inaccurate data being provided by Equifax, potentially lowering credit scores and leaving consumers with higher interest rates or premiums than they should have received.
As part of the settlement, Equifax will pay a penalty of $470,000 to the Pennsylvania Treasury, plus an additional $15,000 in costs to the Office of Attorney General. This marks the largest penalty imposed in a consumer finance case by the Office of Attorney General since at least 2010.
“This settlement holds Equifax accountable for failing to do its most basic job,” said Attorney General Michelle Henry. “We hope that today’s announcement will cause more lenders and insurers to adjust interest rates and refund overpayments to any consumers who were impacted by a negative score shift.”
The issue stemmed from a coding error discovered by Equifax in March 2022, which caused the company to provide inaccurate data to lenders for consumer reports during a three-week period. The problem was partially resolved on April 6, 2022, and fully addressed by April 8, 2022.
Following the discovery, Equifax informed the affected lenders and insurers and offered to reimburse them for any interest rate adjustments made to correct the issue for consumers. As a result, dozens of lenders and insurers have already provided remediation to consumers and obtained reimbursement from Equifax to cover the cost of these adjustments.
Under the terms of the settlement, Equifax has agreed to continue reimbursing lenders and insurers affected by the error to ensure that affected Pennsylvania consumers are made whole. The company will accept requests for reimbursement from its lender or insurer customers until December 31, 2024.
The Attorney General’s Office strongly encourages lenders and insurers to review the loans and policies they originated during March and April 2022 and provide remediation to any consumers who were impacted.
This settlement spotlights the importance of accountability in the consumer finance industry. Credit reporting agencies like Equifax play a crucial role in the financial health of consumers, affecting everything from loan approval to insurance rates. When errors occur, it can cause significant financial harm and stress for individuals.
Consumers who believe they were impacted by the scoring error or any other conduct by Equifax or another company can file a complaint, email scams@attorneygeneral.gov, or call 1-800-441-2555.
For the latest news on everything happening in Chester County and the surrounding area, be sure to follow MyChesCo on Google News and MSN.