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Equifax sued for wrong credit scores sent to 'millions' of Americans

Equifax sued over mistaken credit scores sent to millions of customers this spring .

Seeking class action status in lawsuit filed Wednesday in the Northern District of Georgia, Florida, lawyers for Nydia Jenkins allege Equifax's wrongdoings. But she got a pretty expensive car loan. Equifax's error lasted about three weeks and could have affected millions of people, the lawsuit says.

On Tuesday, The Wall Street Journal reported that Equifax sent incorrect credit scores to millions of customers applying for mortgages and auto loans. The company's coding error affected the customer's score by 20 points in either direction. This was enough to cause some prospective borrowers to be denied loans, reports the journal

Equifax, one of the three major credit bureaus in the United States, provides financial information and scores that affect whether products such as mortgages, credit cards, and auto loans are approved, and interest rates. provided to consumers. they pay. Most credit ratings range from 300 to 850, with higher scoring consumers getting more favorable loan terms.

In a statement to CBS News, Equifax said few people were affected by what it called a "coding problem." 

"This issue occurred over several weeks from 17th March to 6th April and was fixed on 6th April," the company said. .

“As part of its commitment to resolve this issue, Equifax conducted an analysis of the credit scores used by consumers seeking credit during the period in question. , indicating that for those consumers there was no change in the majority of scores during the 3-week period in question. While scores may have shifted, changes in scores did not necessarily have a negative impact on consumer credit decisions. We don't mean that."

The company said it would respond further in court filings.

Dismissed after pre-approval

According to the lawsuit, resident girlfriend Nydia Jenkins received pre-approval for a car loan in January, but Jenkins' loan was dismissed in early April of her. According to the complaint, her score as reported by Equifax was off by 130 points. 

Denied loans forced Jenkins to purchase a car from another dealership at a much higher interest rate, the complaint says. On her first loan, Jenkins would have been paying $350 a month, but according to the lawsuit, she now pays $272 more every two weeks, or about $2,352 a year.

"As one of only three credit bureaus upon which so many Americans rely for credit, he must rely on their accuracy and competence." No," said John Yantunis. , Morgan representing Jenkins&Morgan's attorney.

"This is a big mistake," he said.

Yanchunis said the damages could be "in the millions," depending on how many other plaintiffs participate. The lawsuit seeks Equifax {98} to reimburse the defendants for the extra costs and emotional damage caused by their credit score errors. If a jury finds that her Equifax error was intentional, the company could be sued for damages of up to $1,000 per defendant.

Credit Score Fluctuations

Incorrect scores sent to lenders including Ally Financial, JPMorgan Her Change and Wells Fargo, according to Wall Street Journal report . According to the report, a handful of people affected by Equifax's breach went from having no credit score to having him in the 700s and vice versa.

The news was reported by trade publication National Mortgage Professionalin her May.

Equifax emphasized in its response that the underlying credit report information was not changed. "Most scores remained unchanged during his three-week period during which this issue occurred," the company said. “For consumers who experienced score shifts, initial analysis indicates that only a minority of consumers may have received different credit decisions.”

At Equifax CEO One Mark Begor admitted he was wrong at a financial conference in June.

"There was a coding issue that was a mistake our technical team made in one of our legacy applications, resulting in a score that contained incorrect data. fixed," he said. According to the records of the event, attendees.

Begor added that the company is working with affected consumers and said, "We believe the impact will be very small and not meaningful for Equifax."

Equifax was previously involved in the2017 data breach. This exposed the sensitive information of nearly 150 million Americans and led to the expulsion of thecompany. Then-CEOEquifax said he paid $700 million in fines and damages after the violation.

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