The Consumer Financial Protection Bureau (CFPB) has fined consumer reporting agency Equifax $15m for its failure to adequately investigate consumer disputes.
The bureau’s investigation revealed a series of violations by Equifax, including the disregard of consumer evidence, the reappearance of previously deleted errors on credit reports, misleading communication with consumers, and the use of flawed software leading to inaccurate credit scores.
Equifax’s civil penalty will be deposited into the CFPB’s victims relief fund. This fine comes as a result of Equifax’s failure to comply with the Fair Credit Reporting Act (FCRA).
The FCRA mandates that consumer reporting agencies conduct thorough investigations into disputed information and ensure the accuracy of consumer credit reports.
CFPB director Rohit Chopra said: “Equifax failed in its basic duty to investigate and resolve consumer disputes about inaccurate information on their credit reports.
“Today’s order requires Equifax to pay a civil penalty and follow federal laws on handling credit reporting disputes.”
Headquartered in Atlanta, Georgia, Equifax is responsible for processing millions of consumer credit reports each year, which are used by lenders, employers, and landlords to make important financial decisions.
The company handles around 765,000 disputes per month.
According to the CFPB, the violations include neglecting consumer-submitted documents, failing to fully consider or even review relevant information, and reinserting previously deleted errors back onto credit reports.
Additionally, the company sent consumers confusing and contradictory letters, stating both that disputed items had been verified as accurate and that they had been deleted.
Equifax also failed to block information related to identity theft from appearing on consumer credit reports and did not have sufficient systems to prevent previously deleted errors from reappearing.
One particularly concerning issue was the miscalculation of credit scores due to coding errors in Equifax’s internal software. This resulted in inaccurate credit scores being shared with lenders for hundreds of thousands of consumers.
Furthermore, more than 50,000 consumers had their credit accounts reported multiple times, further complicating their credit histories.
As part of the CFPB’s order, Equifax is required to bring its dispute resolution processes into full compliance with federal law.
