Equifax sued over false credit score scores despatched to “hundreds of thousands” of People

Equifax was sued over incorrect credit scores it sent to millions of customers this spring.

A lawsuit In a filing Wednesday in the Northern District of Georgia, Florida seeking class-action status, attorneys for Nydia Jenkins say an Equifax error caused her to get a much more expensive car loan. The Equifax bug, which lasted about three weeks, could have affected millions of people, the lawsuit says.

The Wall Street Journal reported Tuesday that Equifax sent incorrect credit scores to millions of customers applying for home and auto loans. A coding error at the company affected customers’ scores by as much as 20 points in either direction — enough to deny some prospective borrowers loans, the magazine reported. reported.

As one of the three major U.S. credit reporting companies, Equifax provides consumers with financial information and scores that affect whether people are approved for products including mortgages, credit cards and car loans, and what interest rate they pay. Most credit scores range from 300 to 850, with consumers with higher scores receiving more favorable loan terms.

In a statement to CBS News, Equifax said very few people were affected by the bug, which it called a “coding issue.”

“This issue, which has been going on for weeks since March 17. by April 6, was resolved on April 6,” the company said.

“To address this issue, Equifax conducted an analysis of the credit scores used by consumers seeking credit during the problem period. Our analysis shows that the majority of these users’ scores have not changed over this period. a three-week review period. For those consumers who experienced a change in their scores, preliminary analysis suggests that only a small number of them could have had a different credit decision. Although the score may have changed, the change in score does not necessarily mean that the consumer’s credit decision was negatively affected.”

The company said it would respond further to the lawsuit.

Pre-approved, then rejected

Florida resident Nydia Jenkins was pre-approved for a car loan in January, but Jenkins’ loan was denied in early April after her Equifax credit score dropped 130 points, according to the lawsuit.

Because the loan was denied, Jenkins was forced to buy the car from another dealership at much higher interest rates, the lawsuit says. Under the original loan, Jenkins would have paid $350 a month, but now she pays $272 every two weeks — or about $2,352 a year, according to the lawsuit.

“As one of the three credit reporting agencies that so many millions of Americans depend on to extend credit, we have to rely on the accuracy and expertise of those organizations,” said Morgan & attorney John Jančunis. Morgan, representing Jenkins.

“It’s a big mistake,” he said.

Jančunis said the damages could reach “millions” depending on how many other plaintiffs join. The lawsuit demands that Equifax reimburse the defendants for additional costs incurred as a result of the incorrect credit scores and for emotional damages. If a jury finds that Equifax’s error was intentional, the company could receive up to $1,000 more in damages for each defendant.

Credit score fluctuates

According to a Wall Street Journal report, the incorrect scores were sent to Ally Financial, JPMorgan Change and Wells Fargo, among other lenders. Few people affected by the Equifax breach went from having no credit score in the 700s or vice versa, the report said.

This news was previously reported National Mortgage Specialisttrade publication, May

Equifax emphasized in its response that the basic information on the credit report has not changed. “[T]most scores did not change during the three-week problem,” the company said. “For those users who experienced a score change, initial analysis shows that only a small number of them were able to receive a rating.” different credit decision’.

Equifax CEO Mark Begor acknowledged the mistake at a financial conference in June.

“We have a coding issue that was caused by a mistake by our technology team in one of our legacy programs that resulted in some scores that had incorrect data. And we’ve fixed the issue,” he told attendees, according to the transcript. of the event.

Begor added that the company was working with affected users, noting, “We believe the impact will be relatively small and not something that is significant to Equifax.”

Equifax was previously associated with a in 2017 data breach which exposed the classified information of nearly 150 million Americans and led to the then head of the company was suspended. Equifax paid $700 million in fines and restitution after the breach.

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