Statement: CFPB orders Equifax to pay $15 million penalty

Watchdog agency alleges failure to conduct ‘proper’ investigations of consumer disputes

WASHINGTON — The Consumer Financial Protection Bureau (CFPB) ordered Equifax on Friday to pay a $15 million civil money penalty into the CFPB’s victims relief fund for failing to conduct what the bureau called “proper” investigations of consumer disputes. The order also requires Equifax, one of the three nationwide consumer reporting agencies (credit bureaus), to comply with federal law in its dispute resolution processes.

The CFPB claims in its order that Equifax: 

• Failed in many instances to review all relevant documents submitted by consumers in a dispute and sometimes failed to accept credible documents for consideration
• Put previously deleted information back on credit reports and included information that resulted from identity theft
• Failed to accurately inform consumers of reinvestigation results, including the correct status and outcomes of reinvestigations
• Provided inaccurate credit scores. Coding errors in Equifax’s Online Model Server meant that “over 600,000 consumers were underscored by 10 or more points and 139,000 consumers saw a score decrease of 25 points or more.”

As U.S. PIRG has reported, over the years, the problem that consumers have complained to the CFPB about the most is mistakes on credit reports. This CFPB action comes 10 days after the bureau sued Experian, one of Equifax’ main competitors, alleging many of the same problems.

In response to the Equifax order, PIRG’s Consumer Campaign Director Mike Litt released the following statement:

“Consumers have long reported problems with mistakes on their credit reports. In fact, it’s been the most complained about issue to the CFPB for 11 years in a row. And as the CFPB notes, inaccurate credit reports can threaten people’s access to credit, employment, and housing. Mistakes can also cost consumers time and money trying to fix them. 

“Consumers have no control over mistakes showing up on their credit reports. At the very least, they should be able to get mistakes fixed promptly. But the credit bureaus need to do a better job of preventing mistakes from showing up on credit reports in the first place. 

“The CFPB has a long history of getting the credit bureaus to shape up, but it has required constant vigilance. Hopefully, this order will lead to more permanent changes — and less financial and emotional stress for Americans who don’t deserve it.”