CFPB Orders Equifax to Pay $15 Million Over Failure to Remove Errors on Credit Reports

January 17, 2025 — Press Release

Honda Auto Finance also ordered to pay $12.8 million for credit reporting violations

WASHINGTON – Today, the Consumer Financial Protection Bureau (CFPB) ordered Equifax, one of the “Big Three ” nationwide consumer credit reporting agencies, to pay a $15 million  penalty for conducting faulty and inadequate investigations when consumers disputed errors on their credit reports, in violation of the Fair Credit Reporting Act. The CFPB found that Equifax ignored evidence that consumers submitted with disputes and provided confusing and conflicting letters about the results of its investigations. The CFPB also took aim at Equifax’s use of flawed software coding in March 2022, which led to inaccurate credit scores for hundreds of thousands of consumers.

“For decades, Equifax and others have used a Kafka-esque automated system to conduct so-called investigations when consumers dispute errors in their credit reports,” said Chi Chi Wu, senior attorney at National Consumer Law Center. “I am glad to see the CFPB hold Equifax accountable for their deliberately designed biased and inadequate dispute systems.” Wu is the lead author of Automated Injustice, a key 2009 report on the dysfunction of the credit reporting dispute systems, as well as a 2019 update, Automated Injustice Redux.

“The credit reporting dispute system is not only dysfunctional, it is biased,” said Ariel Nelson, senior attorney at NCLC. “The CFPB’s action calls out Equifax for accepting the creditor or debt collector’s response to a dispute without any review or consideration of the consumer’s side of the story, a practice we call ‘parroting.’ It’s like a judge who always rules for the defendants without considering the facts of each case.”

The CFPB also ordered the American Honda Finance Corporation to pay $12.8 million for reporting 300,000 borrowers as delinquent to the credit bureaus when the company had agreed to allow these borrowers to defer their payments. The Coronavirus Aid, Relief, and Economic Security (CARES) Act specifically required Honda to report these borrowers as current. The CFPB’s investigation also found multiple other credit furnishing accuracy and dispute investigation failures. 

“Congress specifically passed the CARES Act to protect Americans from credit reporting harm during the COVID-19 pandemic,” said Wu. “Honda’s conduct flies directly in the face of that protection, and the CFPB rightfully took action to correct this injustice.”

“Millions of people have filed complaints with the CFPB to express their frustrations with the major credit reporting agencies,” said Lauren Saunders, associate director of NCLC. “The CFPB is under attack, but this action shows why we need a strong CFPB to stop the credit bureaus from ruining our credit reports and other examples of widespread corporate wrongdoing. The CFPB has returned $12 billion to 29 million people and stands up for ordinary folks when dangerous corporate practices threaten our financial security.”

Related Resources

• CFPB Finds Violations of Credit Report Accuracy Requirements, Including for Survivors of Human Trafficking, Apr. 8, 2024
• Past Imperfect: How Credit Scores and Other Analytics “Bake In” and Perpetuate Past Discrimination, Feb. 27, 2024
• Digital Denials: How Abuse, Bias, and Lack of Transparency in Tenant Screening Harm Renters, Sept. 26, 2023
• Mission Creep: a Primer on Use of Credit Reports & Scores for Non-Credit Purposes, Aug. 3, 2022
• Automated Injustice Redux: Ten Years After a Key Report, Consumers Are Still Frustrated Trying to Fix Credit Reporting Errors, Feb. 1, 2019
• Automated Injustice: How a Mechanized Dispute System Frustrates Consumers Seeking to Fix Errors in Their Credit Reports, Jan. 14, 2009