CFPB fines Equifax $15 million for errors on credit reports

By Finance News On Jan 17, 2025

Elijah Nouvelage/Bloomberg via Getty Images

The Consumer Financial Protection Bureau fined Equifax $15 million over errors tied to consumer credit reports, alleging the company failed to conduct proper investigations of disputed information, the federal watchdog announced Friday.

Equifax is one of three major credit reporting agencies in the U.S., a group that also includes Experian and TransUnion.

“Equifax ignored consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores,” according to the CFPB’s order.

Why credit reports are important

Credit reports are a ledger of consumers’ borrowing records, such as loan payment history and bankruptcy filings.

The financial consequences of inaccurate information on those reports can be “severe,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.

“It can change your ability to qualify for a loan, to get a job, to rent an apartment, all kinds of things that are very fundamental to navigating your personal life,” Rust said.

Equifax had ‘flawed’ process, CFPB says

Equifax processes about 765,000 consumer disputes a month, CFPB said.

Its “flawed” dispute policies and technology failures occurred since at least October 2017, “to the detriment of millions of consumers,” according to the CFPB, which alleged Equifax violated the Fair Credit Reporting Act.

Equifax settled the allegations to “[turn] the page on the CFPB’s long-running investigation,” a company spokesperson wrote in an e-mail.

The company has invested more than $1.5 billion into technology and infrastructure improvements over the last few years, including “significant changes” to its dispute process and consumer support, the spokesperson said.

“Our Purpose is to help people live their financial best and we know consumers and our customers depend on our data for important financial decisions,” they wrote. “Even one error affecting a consumer is one error too many,” they added.

'Phantom debt' is flying under the radar — and it could be a problem for the U.S. economy

The $15 million civil penalty follows a lawsuit CFPB filed against another credit bureau, Experian, on Jan. 7, alleging the company conducted “sham” investigations of credit report errors. In a statement on its site, Experian said the lawsuit was “completely without merit” and an “example of irresponsible overreach.”

“Credit bureaus have been sued repeatedly for this kind of conduct,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “They’re decades-old problems,” she said.

An Equifax data breach in 2017 also compromised the personal information of 147 million consumers, for which the company…