By Credit and Collection News Staff

Equifax has agreed to a proposed $100 million nationwide class-action settlement over allegations that a 2022 coding error caused inaccurate credit scores and related credit attributes to be furnished to third parties. The deal, which still requires approval from the U.S. District Court for the Northern District of Georgia, could cover roughly 4 million consumers.

The case stems from a three-week period—from March 17 through April 8, 2022—when a coding issue affected how certain Equifax credit scores and attributes were calculated. According to the proposed settlement materials, scores or attributes that differed from the corrected calculation were sent to lenders, insurers and other businesses in connection with consumer transactions.

Proposed Nationwide Settlement

Plaintiffs Sarah Hunter, Maurice Moore and Michael Rodela asked Chief U.S. District Judge Leigh Martin May on August 12 to approve the agreement with Equifax Information Services LLC and Equifax Inc. The proposed settlement fund is non-reversionary, meaning that unclaimed residual funds will not return to Equifax.

The $100 million fund would pay court-approved settlement-administration costs, attorneys’ fees of up to $33.33 million, litigation expenses of up to $500,000, and cash payments to eligible class members. Plaintiffs estimate payments could range from approximately $95 to $280, depending on claims volume and final deductions, though no individual recovery is guaranteed.

Class counsel has described the agreement as the largest class-action settlement ever achieved under the Fair Credit Reporting Act.

Equifax Denies Liability

Equifax has denied wrongdoing, denied that it violated the law, and maintained that the coding problem did not alter the underlying information contained in consumer credit reports. Rather, the company said the issue affected the calculation of certain credit scores and credit attributes.

In a statement reported August 13, Equifax said it had “principally completed” a global, multiyear $3 billion technology, data and security transformation since 2022. The company agreed to settle after approximately four years of litigation while continuing to contest liability.

The distinction between inaccurate underlying file data and allegedly inaccurate score outputs is likely to be central to how furnishers, CRAs, lenders and consumer advocates assess the case. A credit score is a consumer-reporting output used in underwriting and pricing decisions; a defect in score calculation can therefore create adverse consequences even if the trade-line data in the consumer’s file remains unchanged.

What the Case Alleges

The litigation alleges that the error caused Equifax to furnish scores and attributes different from those it would otherwise have transmitted to third parties. The proposed nationwide class encompasses U.S. consumers for whom Equifax allegedly reported an affected score or attribute to a third party during the March 17–April 8, 2022 period. Eligibility will be based on Equifax’s internal comparison of affected outputs against corrected versions.

For the credit and collections industry, the dispute illustrates a consequential operational risk: data accuracy controls must extend beyond the contents of a consumer file to the systems that transform and transmit that data. Scoring interfaces, model servers, vendor integrations, decisioning platforms and exception-monitoring processes can all create downstream exposure when an error affects lending, insurance or service decisions.

Claims Process Still Pending

There is not yet an active claims process. If the court grants preliminary approval, the proposed administrator, Verita Global, would issue class notices. Under the proposed schedule, notices would be sent 42 days after preliminary approval; consumers would then have 60 days to opt out or object and 90 days to submit a claim.

Consumers who believe they may have been affected should await official class notice and settlement-site information rather than rely on unsolicited outreach. If approved, qualifying claimants will receive pro rata payments, with all valid claimants treated equally under the proposed structure.