Equifax has been sued over erroneous credit scores sent this spring to millions of customers.
one in court case Lawyers for Nydia Jenkins, filed Wednesday in the Northern District of Georgia, Florida, seeking class-action status, alleged that Equifax’s error landed her with a significantly valued car loan. Equifax’s error, which lasted about three weeks, potentially affected millions of people, the suit says.
The Wall Street Journal reported Tuesday that Equifax sent false credit scores to millions of customers applying for home and auto loans. A coding error in the company affected customers’ scores by 20 points in either direction — enough to dissuade some potential borrowers from loans, the Journal informed of,
As one of the three major credit-reporting companies in the U.S., Equifax provides financial information and scores for consumers, influencing how people are approved for products including mortgages, credit cards and car loans, And what interest rate do they pay. Most credit ratings range from 300 to 850, with consumers with higher scores getting more favorable loan terms.
In a statement to CBS News, Equifax said a small number of people were affected by the error, which it called a “coding problem.”
“This issue, which was over a period of a few weeks between March 17 and April 6, was decided on April 6,” the company said.
“As part of our commitment to address this issue, Equifax has analyzed the credit scores used for consumers seeking credit during the time period of this issue. Our analysis indicates that those There was no change in the majority of scores for consumers. The three-week time frame of the issue. For consumers who experienced a score shift, preliminary analysis indicates that only a small number of them received a different credit decision. Although the score may have shifted, the score shift does not necessarily mean that the consumer’s credit decision was negatively impacted.”
The company said it would respond further in court filings.
Pre-approved, then rejected
According to the suit, Florida resident Nidia Jenkins was pre-approved for a car loan in January, but Jenkins’ loan was denied in early April because her credit score was 130 points lower than Equifax.
Because the loan was denied, Jenkins was forced to purchase the car from a different dealership at very high interest, the suit says. Under the initial loan, Jenkins would have paid $350 per month, but she now pays $272 every two weeks — or about $2,352 more per year, according to the suit.
John Yanchunis, an attorney at Morgan & said, “For a credit reporting agency, only one in three, so many million Americans rely on in terms of seeking an extension of credit, we have to rely on the accuracy and ability of those organizations.” ” Morgan is representing Joe Jenkins.
“It’s a big mistake,” he said.
Yanchunis said damages could run into the “millions,” depending on how many other plaintiffs join in. The suit demands that Equifax pay the defendants additional costs due to incorrect credit scores and compensate them for emotional damages. If a jury finds that Equifax’s error was intentional, the company could be on the hook for damages of $1,000 and more for each defendant.
credit score swing
As the Wall Street Journal reports, incorrect scores were sent to Alley Financial, JPMorgan Change and Wells Fargo, among other lenders. The report noted that a small number of people affected by an Equifax breach went from having no credit score to scoring in the 700s or vice versa.
news first. was reported by national mortgage professionalA trade publication, in May.
In its response, Equifax emphasized that the underlying credit report information has not changed. ,[T]There was no change in the vast majority of scores here during the three-week time frame of the issue,” the company said. “For consumers who experienced score shifts, preliminary analysis indicates that only a small number of them number can be obtained. different credit decision.”
Equifax CEO Mark Begor acknowledged the error at a financial conference in June.
“We had a coding issue that was a mistake made by our technology team in one of our legacy applications that resulted in some scores that contained incorrect data. And we fixed the issue,” he told attendees. told of the incident.
Begor said the company was working with affected consumers, “we think the impact is going to be quite small, not something that is meaningful to Equifax.”
Equifax was first called a . was implicated in 2017 data breach which exposed the sensitive information of approximately 150 million Americans and resulted in Removal of the then CEO of the company, Equifax paid $700 million in fines and restitution after the breach.