Equifax Fined $15M for Failing Consumers on Credit Disputes

The Consumer Financial Protection Bureau (CFPB) has imposed a $15 million penalty on Equifax, one of the largest consumer reporting agencies in the United States, for failing to properly investigate disputes regarding credit reports. According to the CFPB, Equifax's handling of consumer disputes was riddled with deficiencies, including ignoring submitted evidence and documents, which allowed previously corrected inaccuracies to resurface on credit reports. This negligence reportedly caused significant harm to consumers by keeping errors in their credit scores and reports, undermining confidence in the accuracy of Equifax's credit reporting processes. Additionally, Equifax was found to have issued confusing and contradictory communications to consumers about the resolution of their disputes, further eroding trust in them.

Equifax processes an estimated 765,000 disputes monthly, supplying credit data to lenders, employers, and landlords who rely on it for critical decisions. Under the Fair Credit Reporting Act, the company is required to thoroughly investigate disputes, notify the party who provided the disputed data, and report the results to consumers. However, the CFPB found that Equifax failed to meet these obligations, instead relying heavily on providers' responses without adequate scrutiny and disregarding evidence provided by consumers. The investigation also revealed that flaws in Equifax's systems allowed errors related to identity theft and previously disputed inaccuracies to reappear on reports. Software coding errors compounded the issue, leading to the dissemination of inaccurate credit scores for hundreds of thousands of consumers. As part of the CFPB's enforcement action, Equifax must comply with federal credit reporting laws and pay the $15 million fine, which will be directed to the CFPB's victims relief fund.