Equifax is agreeing to pay $100 million to settle claims that a coding error distorted some consumers’ credit scores during loan and credit applications.
The proposed settlement was filed in federal court in Atlanta and covers about 4 million consumers nationwide, reports 95.5 WSB.
The erroneous scores may have affected individuals applying for auto loans, mortgages, and credit cards, according to the lawsuit.
Equifax denies violating the law and states the problem did not change information in consumer credit reports.
Company analysis showed most scores stayed the same while many shifted higher.
Lawyers for the class members called the deal by far the largest class-action settlement ever achieved under the Fair Credit Reporting Act.
The $100 million fund will compensate eligible consumers, pay attorneys’ fees, and cover administrative costs.
The settlement remains subject to a federal judge’s approval.
An Equifax spokesperson addressed the matter.
“Equifax has reached a proposed settlement of a class action lawsuit related to a 2022 coding issue. Equifax denies that it violated the law. The settlement is a compromise of disputed claims. This 2022 issue was within a legacy, on-premise server environment that has since been migrated to our industry-leading Equifax Cloud™ infrastructure.”
Since 2022, Equifax has completed a multi-year, $3 billion technology transformation.
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