Writer: Lucy Lazarony
Editor: Adam West
Reviewer: Ashley Fricker
Key Takeaways
- Eligible consumers could receive an estimated $95 to $280 from the proposed $100 million Equifax settlement.
- Equifax said fewer than 300,000 consumers experienced credit score shifts of at least 25 points.
- A separate Equifax settlement could pay eligible consumers up to $600 if they claim by Sept. 1.
Millions of Equifax customers may soon receive a payment after a coding error allegedly sent incorrect information about their credit to lenders and other businesses.
The proposed $100 million settlement could put approximately $95 to $280 in the pockets of eligible consumers.
Plaintiffs Sarah Hunter, Maurice Moore, and Michael Rodela asked the U.S. District Court for the Northern District of Georgia on Aug. 12 to grant preliminary approval of the settlement with Equifax Information Services LLC and its parent company, Equifax Inc.
Chief U.S. District Judge Leigh Martin May granted preliminary approval on Aug. 17.
The proposed class includes approximately 4 million consumers whose credit scores or credit attributes Equifax allegedly misreported between March 17 and April 8, 2022.
Those errors could have real financial consequences. A credit score that’s lower than it should be can make borrowing more difficult and more expensive.
Who Could Receive a Settlement Payment?
The proposed $100 million settlement could put approximately $95 to $280 in the pockets of eligible consumers, plaintiffs estimate.
Those eligible would include U.S. consumers whose credit scores or credit attributes Equifax allegedly reported inaccurately to third parties during the settlement period.
The more valid claims submitted, the less money each eligible consumer may receive. The fund would also cover administration costs and attorneys’ fees and expenses.
“Obviously any data quality issue is a big issue for us. We take it very seriously.” — Equifax CEO Mark Begor
The next step is getting notices into the hands of class members.
Once notified, consumers will have 90 days to file a claim and 60 days to opt out of or object to the settlement. But the money cannot go out just yet: The court must first grant final approval. A final fairness hearing is set for Jan. 22, 2027.
Plaintiffs’ attorneys described the agreement as the largest Fair Credit Reporting Act class action settlement in history.
Equifax denies any liability or wrongdoing.
What Equifax Said About the Credit Score Error
Equifax said fewer than 300,000 consumers experienced a credit score shift of 25 points or more because of the coding issue.
Equifax CEO Mark Begor discussed the issue at an investor conference in June 2022.
“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 going out that had incorrect data in it. We fixed the issue,” Begor said. “Obviously any data quality issue is a big issue for us. We take it very seriously.”
A Separate Equifax Settlement Offers Up to $600
Equifax is also involved in a separate class action lawsuit over allegedly duplicate collection accounts.
About 37,000 consumers may be eligible to claim up to $600 from the proposed $2.2 million settlement. The deadline to file a claim is Sept. 1.
Plaintiff Charmayne Bradberry alleges that her Equifax credit report contained a duplicate $305 collection account that caused her credit score to drop significantly.
Bradberry alleges that the score decline caused a lender to deny her mortgage application, resulting in financial damages.
Equifax denies any wrongdoing in that case, and the court has not ruled in favor of either party. The parties agreed to settle to avoid the costs and risks of continued litigation.
