Millions of American consumers may be eligible to receive compensation from a $100 million collective settlement in the Equifax credit reporting case. The company was accused of providing inaccurate consumer credit information to lending institutions due to errors in its system codes.
According to information released on the settlement website approved by the court, this settlement applies to U.S. consumers who had their credit scores or credit-related information provided to third parties by Equifax between March 17, 2022, and April 8, 2022. However, due to system code issues, the information provided differed from what should have been provided if not for this problem.
Consumers who received email or mail notifications are considered eligible participants in this collective lawsuit settlement.
In order to claim compensation, eligible consumers must submit a valid claim by December 28. Claims can be submitted online through the settlement website or by mail.
Currently, it is estimated that each claimant may receive between $95 and $280 in compensation. The actual amount will depend on deductions for court-approved attorney fees, litigation costs, administrative expenses, and other expenditures, as well as the number of valid claim submissions.
Lawyers representing the parties in the class-action lawsuit state that the settlement agreement is expected to cover approximately 4 million people across the United States.
Any individuals who have objections to the terms of the settlement or wish to opt-out must do so by November 27.
While the preliminary approval of the settlement has been granted by a federal judge, the final approval is pending. The final approval hearing is set to take place on January 22, 2027.
This settlement aims to conclude a nearly four-year-long legal battle that arose from system code issues at Equifax in the spring of 2022.
According to the lawsuit, Equifax was accused of providing inaccurate credit scores to multiple banks and other lending institutions for consumers applying for auto loans, mortgages, and credit cards.
Plaintiffs allege that these scores sometimes deviated by positive or negative 20 points or more, which could impact the interest rates consumers receive or even affect the approval of their applications.
The plaintiffs claim that Equifax violated the U.S. federal Fair Credit Reporting Act, which requires credit reporting agencies to follow reasonable procedures to ensure the maximum possible accuracy of the information they provide.
Equifax has denied any wrongdoing and has not admitted to violating any related laws.
In August 2022, Equifax acknowledged that there were system code issues affecting the calculation of certain indicators used in credit scoring. At that time, the company stated that fewer than 300,000 affected consumers experienced credit score changes of 25 points or more.
The company mentioned, “While scores may have changed, score changes do not necessarily indicate that a consumer’s credit approval decisions were negatively impacted.”
This incident has been a significant blow to Equifax, a globally renowned credit reporting agency, which had previously faced a large-scale data breach in 2017, exposing personal information of nearly 150 million Americans.
Following the 2017 data breach incident, Equifax agreed to pay at least $575 million to settle related investigations and claims. Under the settlement plan at the time, consumers could opt for free credit monitoring services or apply for cash compensation, with the maximum compensation amount disclosed as $125.
This translation summarizes the recent updates on the Equifax credit reporting settlement in the United States.