Equifax has agreed to a proposed $100 million settlement resolving a class-action lawsuit over allegedly inaccurate credit scores reported in 2022. The case was filed in the U.S. District Court for the Northern District of Georgia in Atlanta.
The lawsuit alleges that a coding error in an Equifax computer system caused the credit bureau to send incorrect scores to lenders, insurers and other companies. According to the allegations, the problem affected about 4 million Americans who applied for mortgages, auto loans or credit cards between March 17, 2022, and April 6, 2022.
In some cases, the lawsuit says, scores were reduced by more than 20 points. A credit score is a numerical assessment that companies commonly use when evaluating applications for credit. The plaintiffs allege that the inaccurate reports kept some consumers from receiving loans or caused them to face higher interest rates.
What the case alleges
The litigation began in August 2022, after three named plaintiffs said Equifax had reported incorrect scores in their cases. The proposed settlement would resolve the claims without a trial. Equifax has agreed to the deal while denying that it violated the Fair Credit Reporting Act, the federal law that governs the accuracy and handling of consumer credit-report information.
The proposed agreement is not an admission that Equifax broke the law. The settlement website says the parties chose the agreement to avoid the cost, delay and uncertainty of continuing the case through trial and possible appeals. The court must approve the proposal before it becomes final.
“We’re thrilled to have achieved this result for consumers after nearly four years of litigation,” said David Berger, an attorney appointed to co-lead the case.
Berger, a partner at the Oakland, California-based law firm Gibbs Mura, described the agreement as the largest FCRA-related settlement in history in a news release. He said credit reporting agencies should be accountable when they fail to use safeguards for information that can affect consumers’ financial opportunities.
Settlement details reported in the case
| Item | Detail |
|---|---|
| Proposed settlement | $100 million |
| Alleged period of inaccurate reporting | March 17-April 6, 2022 |
| Consumers allegedly affected | About 4 million |
| Court | U.S. District Court for the Northern District of Georgia |
- The complaint alleges a computer coding error produced inaccurate Equifax scores.
- The alleged score reductions affected applications for mortgages, auto loans and credit cards.
- Equifax denies violating the law, and the proposed settlement still requires court approval.
The agreement follows nearly four years of litigation. The plaintiffs and Equifax have chosen to settle disputed claims rather than continue toward a trial. The available case details identify the settlement amount and the alleged reporting period, but do not establish that every person whose score was affected will receive the same payment or that the agreement has received final approval.
