The Consumer Financial Protection Bureau (CFPB) has imposed a $15 million fine on Equifax, one of the leading credit reporting agencies in the U.S. The penalty was levied after the CFPB found that Equifax had not properly investigated disputed consumer information, a revelation made public on Friday.
Equifax, along with Experian and TransUnion, forms the trio of major credit reporting agencies in the United States. The CFPB’s order stated, “Equifax neglected to consider consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to reappear in credit reports, confused consumers with conflicting investigation results letters, and employed faulty software code, resulting in inaccurate consumer credit scores.”
The significance of credit reports is paramount as they offer a comprehensive view of consumers’ borrowing history, including loan payment records and bankruptcy filings. According to Adam Rust, Director of Financial Services at the Consumer Federation of America, inaccuracies in these reports can lead to severe financial repercussions. These inaccuracies can impact an individual’s ability to qualify for loans, secure jobs, or rent apartments.
The CFPB noted that Equifax, which processes around 765,000 consumer disputes monthly, has been operating with flawed dispute policies and technology failures since October 2017. These issues have adversely impacted millions of consumers, and the CFPB alleges that Equifax violated the Fair Credit Reporting Act.
In response to the allegations, Equifax stated that it has invested more than $1.5 billion into technology and infrastructure enhancements in the past few years. This investment includes significant changes to their dispute process and consumer support systems. The company affirmed its commitment to helping individuals achieve their financial best, acknowledging that even a single error affecting a consumer is one too many.
This $15 million penalty follows a lawsuit that the CFPB filed against Experian in January, accusing the company of conducting false investigations into credit report errors. Equifax was also involved in a data breach in 2017, which compromised the personal information of 147 million consumers, leading to a $700 million settlement.
Experts recommend that consumers check their credit reports annually and before applying for credit, loans, insurance, or jobs. Consumers should verify the accuracy of identity information and account information on their credit reports. In case of any discrepancies, consumers should dispute them in writing and also report the issue to the CFPB and their state attorney general’s office. If the error isn’t rectified after multiple attempts, consumers may consider legal consultation.
