The Consumer Financial Protection Bureau (CFPB) announced on Jan. 17, 2025, that Equifax, one of the three major credit bureaus, must pay a $15 million penalty for not conducting thorough investigations when consumers reported mistakes on their credit reports.
If you’re someone who has made complaints about Equifax regarding its failure to resolve your credit report dispute, does it mean that a payday is coming your way? Not exactly.
Although there are times when CFPB orders do include consumer redress (in which victims are compensated), this is not one of those times.
“The $15 million that was imposed on Equifax was a civil money penalty,” says Chi Chi Wu, senior attorney at the National Consumer Law Center. In other words, it was a fine, not a lawsuit fund from which consumers can try to make a claim.
Instead, the money will be deposited into the CFPB’s victims relief fund, which is a general pool of money used to help people who have been financially harmed by companies that break federal consumer financial protection laws.
Even if it won’t put any money in your pocket, it’s a good opportunity to learn how to improve your chances of getting a swift and fair correction should you ever encounter a mistake on your credit report.
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What the Equifax Penalty Means for You
You already know that it’s important to check your credit reports regularly, and to file a dispute with the credit bureaus if you find any errors. But what if you submit all the necessary documentation that proves there is a mistake, and the issue is not fixed?
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“You’re supposed to get a reasonable investigation with an employee assigned to the case who can get down to the facts. But that’s not what happens,” Wu says. “It’s very much an automated perfunctory system that relies a lot on codes and skimpy information.”
The CFPB found that Equifax wasn’t actually doing much investigating.
“If the data furnisher says ‘we’re right,’ then the bureau just accepts that. We call that ‘parroting,’ because they parrot whatever the data furnisher responds,” Wu says.
The CFPB also found that Equifax allowed previously deleted errors to be reinserted into credit reports and used flawed software code, which led to inaccurate consumer credit scores.
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How to Avoid Being Caught Up in a Dispute that Goes Nowhere
In theory, the Equifax penalty should motivate the credit bureaus to be more thorough in their investigations. In the meantime, you can also take proactive steps to make a credit report dispute more successful.
— Send the dispute in writing. “Don’t use the online automated system because it’s hard to create a paper trail,” Wu says. Instead, get a fresh copy of the credit report, circle the error and attach copies of any documents that support your claim, then send it through postal mail with a return receipt.
— Contact the furnisher and the bureau at the same time. Let’s say you discover a credit card issuer reported that you were delinquent, but you have proof that it was an error. While you may be inclined to start by contacting the credit card company, you should also take the simultaneous step to report the error to the bureau. “There’s this weird quirk in the Fair Credit Reporting Act where if you only send your dispute to the data furnisher you don’t protect your rights under the Fair Credit Reporting act should you need to go to court,” Wu says.
What to Do if Your Dispute Isn’t Resolved
If an error is not fixed in a timely manner, your next step is to send a copy of the dispute to the CFPB and your state attorney general, and they may provide you with next steps.
Finally, you could hire a lawyer.
“You may want to consider that if it’s an error that cost you money because you tried to refinance your house or buy a car and you ended up having to pay higher interest rates. When that kind of thing happens, it’s good to talk to an attorney,” Wu says.
If you do decide to take legal action, Wu recommends checking out the National Association of Consumer Advocates website, which has a group of attorneys that specialize in these types of cases.
And if you have a good case, it might not cost you anything out of pocket.
“The Fair Credit Reporting Act is a law where you can get back your attorneys fees as part of any award you get for a violation,” says Wu . “Sometimes you don’t have to pay the lawyer in advance if they work on contingency.”
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Equifax Ordered to Pay $15 Million: Here’s What Consumers Should Know originally appeared on usnews.com
