The case centers on a technology problem disclosed by Equifax in August 2022. During the affected three-week period, incorrect scores were provided to lenders while consumers were applying for mortgages, auto loans, credit cards and other forms of financing. According to The Independent, lawyers representing the affected consumers said the agreement would be the largest class-action settlement reached under the federal Fair Credit Reporting Act.
A Coding Error Changed Some Scores by Significant Margins
Equifax said the coding issue affected how some credit scores and credit attributes were calculated, while maintaining that information contained in consumer credit reports was not altered. The company corrected the problem after the three-week period and has denied violating federal law.
The scale of some changes was substantial. According to The Independent, about 300,000 consumers had scores that differed by at least 25 points. Credit scores can influence whether applicants qualify for financing and the interest rates offered to them, making even temporary inaccuracies relevant during the lending process.
The lawsuit was filed in August 2022 by Florida consumer Nydia Jenkins. She alleged that the Equifax error caused her score to fall by 130 points and affected her ability to obtain an auto loan. The complaint said she ultimately paid significantly more for financing.
The plaintiffs argued that correcting credit information later did not necessarily undo financial harm that had already occurred. Equifax disputed the claims and challenged allegations that it failed to use reasonable procedures to ensure the maximum possible accuracy of the information it reported.
Settlement Would Provide Cash Payments to Eligible Claimants
Under the proposed settlement, eligible consumers would not automatically receive equal portions of the $100 million fund. Attorneys’ fees, administrative expenses and other costs would be deducted first, while final payments would depend on the settlement terms and the number of valid claims submitted.
According to The Atlanta Journal-Constitution, payments would be made on a pro-rata basis to U.S. consumers whose credit scores were misreported because of the coding issue. Class members with valid claims would receive the same treatment under the agreement, lawyers for the plaintiffs told the court.
A public website would be created if the settlement receives judicial approval, allowing consumers to obtain information and submit claims. Class members would also be able to object to the settlement or opt out if they wished to preserve their right to pursue separate legal action against Equifax over the 2022 incident.
Equifax has not admitted liability or wrongdoing. The company said the settlement reflects an effort to avoid the costs and risks of continued litigation after roughly four years of legal proceedings.
The proposed agreement follows earlier regulatory scrutiny connected to the same coding issue. In January 2025, New York Attorney General Letitia James announced a $725,000 settlement with Equifax after state investigators found that more than 77,000 New York residents had been affected. The nationwide class-action deal now awaits approval from a federal judge before the claims process can move forward.
