By Hank Russell
The New York Attorney General’s office recently reached a settlement in the amount of $725,000 with Equifax Information Services, LLC for inaccurately reporting tens of thousands of New Yorkers’ credit scores to lenders, inflating costs for loans and other products between March and April 2022.
Due to a coding error, Equifax falsely lowered consumers’ credit scores, leading lenders and insurers to price some of their loans and policies higher than they would have if Equifax had provided accurate credit reports, according to the AG’s office. As a result of the settlement, Equifax will pay $725,000 and implement more safeguards to prevent future errors that raise costs for consumers.
In March 2022, Equifax discovered a coding error which caused the agency to give inaccurate data to lenders for consumer reports during a three-week period. While Equifax resolved the issue by April 8, 2022, the company estimated that 77,000 New Yorkers had their credit scores wrongly declined, meaning that Equifax may have provided inaccurate data about them that led to a lower credit score.
In the summer later that year, Equifax notified the lenders and insurers whose borrowers were potentially harmed by the coding error. The company offered to reimburse the lenders for any interest rate adjustments the lenders and insurers made to give consumers the interest or premium rates that they would have qualified for if it had provided accurate consumer reports. As a result, dozens of lenders and insurers have provided remediation to consumers and obtained reimbursement from Equifax to cover the cost of this remediation.
Dozens of New York consumers also paid Equifax directly for products that showed them their credit score during the period in which the scores were inaccurate. The AG’s office will contact those who are eligible for restitution. As part of the settlement, Equifax will also be required to implement consumer safeguards and monitor incident reports that its customers file when they encounter an error at least once per week.
“Credit scores affect some of the most significant parts of New Yorkers’ lives, from the cars they can buy, to the housing they live in, to their ability to start a small business,” said Attorney General Letitia James. “Consumers depend on credit bureaus like Equifax to report their credit history accurately. Equifax’s failure to do its most basic job inflated costs for consumers across New York. This settlement will help those affected get restitution, and my office will continue to hold companies accountable when they wrongly raise costs for consumers.”
Long Island Life & Politics reached out to Equifax for comment. An Equifax spokesperson said in a statement, “We recognize the important role our company plays in supporting businesses and in the financial lives of consumers. We take this responsibility very seriously and have stood behind our customers and consumers since informing them of this issue in 2022.”
The spokesperson noted that Equifax has invested more than $1.5 billion over the last few years to upgrade its technology infrastructure. Its North American Equifax Cloud migrations were principally completed in 2024.
“When we began this process, we intended to redefine how Equifax data is ingested, governed, provisioned and produced,” the spokesperson said. “Our vision for the Equifax Cloud™ is to help our customers innovate faster to create more effective insights into the people and communities they serve.”
New Yorkers who wish to report an issue with a credit rating agency may file an online complaint with OAG’s Consumer Frauds and Protection Bureau or call 1 (800) 771-7755.