The CFPB discovered that Equifax disregarded consumer documents and evidence related to disputes, permitted inaccuracies that had been previously deleted to be reintroduced into credit reports, issued confusing and contradictory letters to consumers regarding the outcomes of its investigations, and employed defective software code that resulted in incorrect consumer credit scores.
The order mandates Equifax to adhere to federal law and the company must pay a civil penalty of USD 15 million, which will be allocated to the CFPB’s victims' relief fund.
The CFPB identified that Equifax contravened the law by relying on ineffective systems and inadequate processes, while overly depending on furnishers to resolve disputes. In particular, the CFPB found that Equifax adversely affected consumers by:
Inadequate investigation of consumer disputes: Equifax's dispute submission process restricts consumers from fully and accurately conveying their issues. Often, Equifax overlooked relevant information provided by consumers, sometimes failing to review it altogether;
Reinstating previously deleted errors and failing to block identity theft information: Equifax lacked systems to identify and prevent previously removed information from reappearing on consumer credit reports;
Disseminating inaccurate credit scores and data to lenders: internal software coding errors at Equifax led to the miscalculation and distribution of incorrect credit scores for hundreds of thousands of consumers. The company also reported the same credit accounts multiple times for over 50,000 consumers.
Under the Consumer Financial Protection Act, the CFPB can act against institutions violating consumer laws, including the FCRA and CFPA. The order mandates Equifax to:
Comply with federal credit reporting laws, improving dispute resolution processes;
Pay a USD 15 million penalty to the CFPB's victims' relief fund.
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