Atlanta-based consumer credit reporting giant Equifax has agreed to pay $100 million to settle a class-action lawsuit stemming from a 2022 coding error that allegedly impacted millions of consumers’ credit scores and credit attributes.
The proposed settlement, filed Wednesday in federal court in Atlanta, comes after nearly four years of litigation over what court documents describe as the “OMS Issue” — a coding error in Equifax’s systems that occurred between March 17, 2022, and April 8, 2022.
According to the lawsuit, the issue caused certain credit scores and credit attributes reported by Equifax to lenders and other third parties to differ from what they otherwise would have been.
In 2022, Channel 2 Action News reported that during those three weeks, Equifax credit bureau sent erroneous credit scores for people applying for auto loans, mortgages and credit cards to banks big and small.
During that time, the housing market was on fire. And there’s a chance some Channel 2 Action News viewers ended up paying more for their mortgage than they should have.
“They could have been denied a loan, or charged a higher interest rate for that loan,” Channel 2 consumer advisor Clark Howard said.
In a court filing seeking preliminary approval of the settlement, attorneys for the plaintiffs said the agreement was reached after years of discovery, litigation and settlement negotiations.
“Following nearly four years of hard-fought litigation and discovery, and arm’s-length settlement negotiations,” the parties agreed to resolve the case on behalf of consumers whose credit scores or credit attributes were affected by the coding issue.
Court documents describe the settlement as creating a non-reversionary $100 million fund that will be used to compensate eligible consumers, cover attorneys’ fees and pay administrative costs associated with notifying class members and processing claims.