Equifax has agreed to pay a fine of $470,000 to the Pennsylvania Treasury Office. The agreement was reached between the group and Attorney General Michelle Henry and concerns a series of errors in the data provided by Equifax to banks and insurers that affected tens of thousands of citizens. A total of 51,000 individuals experienced a downgrade in their credit scores due to these erroneous data, consequently resulting in increased interest rates and costs for loans and insurance policies.
The agreement marks the highest fine imposed for this type of case by the Pennsylvania Attorney General’s Office since at least 2010. Equifax had previously reached an agreement with the Office in 2019 following a massive data breach.
“As one of the nation’s largest consumer credit reporting agencies, Attorney General Michelle Henry encourages the involved banks and insurers to adjust interest rates and reimburse overpayments to all consumers who have been erroneously affected by a negative shift in their credit score. Equifax, for its part, had already promised to accept refund requests from credit institutions and insurers until the end of 2024, and consequently, dozens of credit institutions and insurers have provided refund solutions to consumers, with costs covered by the Group.
The coding error was discovered in March 2022 by Equifax and for three weeks caused incorrect information flows. The inaccurate scores led credit institutions and insurers to set higher prices for some of their financial and insurance products. Equifax fully resolved the issue on April 8, 2022. In the summer of 2022, Equifax informed credit institutions and insurers about the risk of potentially harming their consumer customers.
Since the Attorney General’s Office launched the Consumer Financial Protection Unit in July 2017, the unit has obtained over $331 million in relief for over 493,000 Pennsylvania consumers. This figure includes $124 million in refunds, $41 million in fines and other payments, and $207 million in debt cancellation.
Blogger and Investment Management Advisor with focus on Distressed Assets & NPL. Massimo is Chief NPL & Fintech Editor at Credit Village Magazine.