Equifax Seeks Dismissal In 'Glitch' Lawsuit
Seven plaintiffs claim an Equifax glitch hurt their credit scores, and thus their loan applications.
Equifax, Inc. has asked a federal judge in Georgia to dismiss a class action lawsuit over a glitch that resulted in credit score errors last spring.
Equifax claimed in the lawsuit that the glitch should not be considered a violation of the Fair Credit Reporting Act, or FCRA, for several reasons, including because it was a simple mistake.
The lawsuit stems from a glitch that affected scores Equifax gave to lenders in March and April of 2022.
A woman filed the lawsuit back in August and six plaintiffs have joined since, all claiming the problem resulted in credit scores that were mistakenly lowered by between 26 and 170 points.
The plaintiffs, who live across seven states, claim they either were denied a loan or received less favorable terms.
The lead plaintiff, a Florida woman, claimed she was preapproved in January 2022 for a car loan with a $350 monthly payment. Her current loan, however, costs $504 a month after getting a credit score that was 130 points lower, according to the lawsuit.
Her lawsuit notes Equifax confirmed the coding issue in a statement to the media back in May.
The document also claims that Equifax is “obligated to ensure maximum possible accuracy” because, as the company states on its website, businesses “rely on us for consumer and business credit intelligence, credit portfolio management, fraud detection, decisioning technology, marketing tools, and human resources-related services.”
But in a motion for dismissal, filed Tuesday, Equifax claims FCRA violation only occur after a “consumer reporting agency either knowingly or recklessly violated the requirements.”
The company said the glitch — which it called an “alleged coding issue” — was simply a human error that occurred when staff was updating Equifax’s system.
Furthermore, Equifax’s lawyers relied on a past court ruling that determined Equifax “is not a consumer reporting agency subject to the requirements of the FCRA.”
Additionally, Equifax argued that the FCRA differentiates credit reports from credit scores. Consumers have the ability to dispute findings in a credit report, such as factual inaccuracies about payment history.
But Equifax said in its lawsuit that credit scores are “statements ‘expressing … professional judgment about the value and prospects” of a particular customer’s creditworthiness.”
The company also argued that the case should not be a class action lawsuit, because each defendant is seeking only actual and compensatory damages, which would be determined on a case-by-case basis.