Warren, Warner, Krishnamoorthi Blast Equifax, Demand Answers for “Deeply Troubling” Allegations of Incorrect Credit Score Reports that Harmed Consumers
Borrowers Were Denied Approvals or Charged Higher Interest Rates for Auto Loans, Mortgages, and Credit Cards Lawmakers Call Out Equifax’s Pattern of Failures to Alert Consumers and Regulators About Issues with Credit Scoring System
WASHINGTON – U.S. Senators Elizabeth Warren (D-Mass.) and Mark Warner (D-Va.) and U.S. Representative Raja Krishnamoorthi (D-Ill.) sent a letter to Equifax, blasting the company for its failure to correctly report consumer credit scores and its delays in informing lenders and consumers of these problems – resulting in consumers being denied or charged higher interest rates for auto loans, mortgages, and credit cards. The lawmakers are calling on Equifax to answer for the mistakes in its credit scoring system and its failure to alert consumers and regulators about these mistakes.
"This is a deeply troubling allegation, raising questions about the impact your opaque practices may have on America's financial institutions and on individual borrowers, who may be stuck paying higher costs for loans, credit cards, cars, and houses. Your company owes the public a clear and transparent explanation for why and how it made such grievous errors, the scope of the errors, and why you have failed to notify affected consumers of these errors," wrote the lawmakers.
Equifax, just one of the three national credit bureaus, maintains credit scores on more than 200 million U.S. consumers and sells this information to lenders to help determine loan decisions. In 2021, Equifax delivered more than 2.8 billion consumer credit card files to U.S. lenders.
New reporting revealed that from March 16, 2022 to April 6, 2022, Equifax sent incorrect credit scores for hundreds of thousands of consumers to lenders, resulting in higher interest rates and denied applications. Equifax claimed that "300,000 consumers experienced a score shift of 25 points or more" but has not released any additional data on how these consumers were impacted. Swings of 25 points or more could materially impact the rates consumers are offered or even result in an unfair rejection.
In the letter, the lawmakers call out Equifax for its failure to alert consumers of these inaccuracies and for waiting more than three weeks to alert lenders. They also note Equifax's disturbing pattern of failing to alert consumers and lenders about problems with its credit scoring system. In 2017, the company waited 40 days to alert regulators and consumers about an egregious data breach.
The lawmakers are calling on Equifax to answer a set of questions about its inaccurate credit score reporting, its impact on consumers, and its plans to notify and compensate impacted consumers by August 19, 2022.
In May 2019, Congressman Krishnamoorthi, Senator Warren, Senator Warner, and the late Congressman Elijah Cummings reintroduced the bicameral Data Breach Prevention and Compensation Act to hold large credit reporting agencies accountable for data breaches involving consumer data.
Click here to read the full text of the letter.