By Erik Larson and Shubham Saharan | Bloomberg
Equifax, the second-largest global credit bureau, has been hit with a proposed class-action lawsuit following a report that it provided inaccurate credit scores to millions of U.S. consumers seeking loans. loan
The lawsuit, filed Wednesday in federal court in Atlanta, alleges violations of the Fair Credit Reporting Act. It is seeking financial damages and a court order requiring Equifax to notify all customers affected by the score-reporting glitch, which was reported in the Wall Street Journal Aug. 2.
“We believe that many of the people who were affected – some of whom may not even know what happened – have suffered serious financial consequences,” said John Morgan and John Yanchunis, the lawyers who filed the lawsuit. and in the case, said in a statement.
Equifax said some consumers’ credit scores changed because of a computer error that has since been corrected.
A “coding issue” with the server led to the inaccurate scores, the consumer credit reporting company said Tuesday in a statement posted on the web. The Atlanta-based company did not say how many consumers were affected.
“There was no change in most scores during the three-week issue period,” the company said. “For consumers who experienced a score transfer, the initial analysis showed that only a small number of them received a different credit decision.”
The Wall Street Journal reported that Equifax provided inaccurate credit scores to millions of U.S. consumers seeking loans, citing bank executives and people familiar with the matter who it did not identify. .
The incorrect scores were sent from mid-March to early April, and the disclosure of the errors began in May, the newspaper reported.
The scores cover consumers who apply for auto loans, mortgages and credit cards at banks and non-bank lenders including JPMorgan Chase & Co., Wells Fargo & Co. and Ally Financial Inc., according to the report.
The issue follows a cyberattack on Equifax, which maintains US consumer credit reports and sells them to lenders, which it disclosed in September 2017. Hackers accessed data including numbers of Social Security, driver’s license numbers and addresses, it said at the time.