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Regulators should investigate; Congress should enact fines.
WASHINGTON -- According to the Wall Street Journal, Equifax sent to lenders millions of incorrect credit scores for consumers applying for auto loans, mortgages and credit cards. The Journal reports that the scores, sent during a three-week period from mid-March through early April, were sometimes off by 20 points or more in either direction. The Journal says Equifax called the error a “technology coding issue.”
Equifax’s news release offers few specifics about the incident -- not even a date -- saying, “a coding issue…in place over a period of a few weeks, resulted in the potential miscalculation of certain attributes used in model calculations” and “we have determined that there was no shift in the vast majority of scores during the three-week timeframe of the issue. For those consumers that did experience a score shift, initial analysis indicates that only a small number of them may have received a different credit decision.”
Mike Litt, U.S. PIRG’s consumer campaign director, issued the following statement:
“After losing our Social Security numbers in the worst data breach in history nearly five years ago, Equifax has shown once again that we can’t trust it to do its one job -- a job that Equifax and the other two national bureaus appointed themselves to do. We never asked them nor gave them permission to collect data on us or sell the credit scores derived from that data to lenders.
“Equifax and the other two national credit bureaus serve as gatekeepers to much of the financial marketplace. Mistakes on credit scores can keep people from getting mortgages, good interest rates or even a job. Consumers have long reported problems with mistakes on their credit reports. Now they have to worry about whether their credit scores are incorrect even if their reports are correct.
“The Journal reported that the Equifax CEO said it’s ‘not something that’s meaningful to Equifax.’ That’s outrageous. Why isn’t he apologizing to the millions of consumers who might pay too much for credit or be denied credit? That impact will not ‘be quite small’ to those people.
“As was the case with its 2017 data breach, many unanswered questions and explanations don’t add up. For starters, what caused the coding issue? How exactly will it be prevented in the future? Are there other problems we don’t know about?
“We’re calling on regulators to investigate Equifax to get to the bottom of these questions. Congress should also act to protect consumers and prod the credit bureaus to take data accuracy seriously by requiring them to pay hefty fines when they put people’s credit at risk.”
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