Pennsylvania Attorney General Michelle Henry announced on Thursday a $485,000 settlement with Georgia-based credit reporting agency Equifax for a coding error resulting in inaccurate reports to lenders during a three-week period in 2022 — a mistake that led to raised loan and insurance policy costs for tens of thousands of consumers.
Approximately 51,000 Pennsylvania residents experienced a negative score shift due to the error, according to a news release.
“As one of the nation’s largest consumer reporting agencies, American consumers and lenders depend on Equifax to provide accurate consumer reports,” Ms. Henry said in a prepared statement. “This settlement holds Equifax accountable for failing to do its most basic job. We hope that today’s announcement will cause more lenders and insurers to adjust interest rates and refund overpayments to any consumers who were impacted by a negative score shift.”
The company will have to pay a penalty of $470,000 to the Pennsylvania Treasury and an additional $15,000 to the Office of the Attorney General as a result of the settlement.
Equifax representatives did not immediately respond to requests for comment.
In March 2022, Equifax discovered the coding error that led to higher costs of loans and insurance policies for customers. The issue was fully resolved by April 8, 2022, officials said. The company notified lenders and insurers impacted in the summer of 2022.
At the time, Equifax offered to reimburse the lenders for any interest rate adjustments for consumers, and agreed to continue reimbursements to those impacted as part of the settlement. Consumers can make requests for reimbursement to Equifax until Dec. 31.
Thursday’s agreement is the largest penalty imposed in a consumer finance case by the Attorney General’s office since 2010, according to a news release. Equifax previously settled with the Attorney General’s office in 2019 following a massive data breach.
The settlement was filed in the Philadelphia Court of Common Pleas by Nicholas Smyth, assistant director for consumer financial protection.
Ciara McEneany: cmceneany@post-gazette.com
First Published: March 14, 2024, 8:14 p.m.
