Equifax has agreed to a proposed $100 million settlement over allegations that a coding error caused inaccurate credit scores or other credit attributes to be sent to third parties in 2022. The agreement could provide eligible consumers with estimated payments of $95 to $280.
The settlement is not final. The amount paid to each claimant will depend on how many valid claims are filed, along with deductions for approved fees, expenses and administrative costs. Equifax denies wrongdoing and has not admitted liability. The credit bureau agreed to settle, according to the report, to avoid the expense and uncertainty of continuing litigation.
What the alleged error affected
The coding problem was in Equifax’s credit-reporting system from March 17 through April 8, 2022. During that period, the issue allegedly led Equifax to report inaccurate credit scores or credit attributes to third parties. A credit attribute is information used in evaluating a consumer’s credit profile.
The reported information could have affected lending decisions. The allegations include potential loan denials and higher-than-needed interest rates on mortgages, auto loans and credit cards. The reported information had to be connected to an eligible transaction for a consumer to qualify under the proposed agreement.
| Settlement detail | Information reported |
|---|---|
| Total proposed settlement | $100 million |
| Estimated individual payment | $95 to $280 |
| System issue period | March 17-April 8, 2022 |
| Status | Proposed; not final |
Who may qualify
The reported eligibility requirements include all of the following:
- The consumer was located in the United States.
- An Equifax credit score or credit attribute was affected by the coding issue between March 17 and April 8, 2022.
- Equifax reported that information to a third party in connection with an eligible transaction.
Consumers who were affected should have received a notification by email or regular mail from the settlement administrator, according to the report. The notice may also be in a junk-mail folder. The report cautions consumers to remain alert for phishing attempts, which are fraudulent messages designed to obtain personal information.
Why the case matters beyond the payment
The allegations highlight how an error at one credit bureau can affect decisions by lenders and the terms offered to borrowers. A credit report contains information that companies use when reviewing applications, but information from a bureau is not automatically accurate simply because it comes from a major reporting company.
The proposed settlement concerns Equifax’s system and does not announce a change to how Experian or TransUnion reports consumer information. It also does not establish that every person whose credit information was handled by Equifax was affected. Eligibility depends on the specific coding issue, the time period and the reported connection to an eligible transaction. Because the agreement remains subject to final approval, the reported payment estimates may not be the amounts ultimately distributed.
