Today, the Consumer Financial Protection Bureau (CFPB) took action against Equifax, the nationwide consumer reporting agency, for its failure to conduct proper investigations of consumer disputes. The CFPB found Equifax ignored consumer documents and evidence submitted with disputes, allowed previously deleted inaccuracies to be reinserted into credit reports, provided confusing and conflicting letters to consumers about the results of its investigations, and used flawed software code which led to inaccurate consumer credit scores. The order requires Equifax to comply with federal law, and Equifax must pay a $15 million civil money penalty, which will be deposited into the CFPB’s victims relief fund.

“Equifax failed in its basic duty to investigate and resolve consumer disputes about inaccurate information on their credit reports,” said CFPB Director Rohit Chopra. “Today’s order requires Equifax to pay a civil penalty and follow federal laws on handling credit reporting disputes.”

Equifax Inc. is a nationwide consumer reporting agency with headquarters in Atlanta, Georgia. Equifax is the parent company to Equifax Information Services LLC, and is one of the three major consumer reporting agencies in the United States. It aggregates data about most adult consumers and sells that data to its customers in the form of consumer reports that are used by lenders, employers, landlords, and others to make important decisions about consumers. Equifax processes approximately 765,000 disputes each month.

The Fair Credit Reporting Act (FCRA) requires consumer reporting agencies to investigate the accuracy of disputed information and take steps to ensure consumers’ credit reports are accurate. For example, consumer reporting agencies must provide notice of a consumer dispute to the furnisher who provided the disputed information, conduct reasonable investigations to determine whether the disputed information is inaccurate, and provide the results of the investigation to the consumer.

The CFPB found Equifax violated the FCRA’s requirements for investigating and processing consumer disputes and assuring maximum possible accuracy of information on its consumer reports. The CFPB also found that Equifax violated the law by using ineffective systems and flawed processes, and excessively deferring to furnishers to address disputes.