Personal Finance
CFPB fines Equifax $15 million for errors on credit reports
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The Consumer Financial Protection Bureau fined Equifax $15 million over errors tied to consumer credit reports, alleging the company failed to conduct proper investigations of disputed information, the federal watchdog announced Friday.
Equifax is one of three major credit reporting agencies in the U.S., a group that also includes Experian and TransUnion.
“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,” according to the CFPB’s order.
Why credit reports are important
Credit reports are a ledger of consumers’ borrowing records, such as loan payment history and bankruptcy filings.
The financial consequences of inaccurate information on those reports can be “severe,” said Adam Rust, director of financial services at the Consumer Federation of America, a consumer advocacy group.
“It can change your ability to qualify for a loan, to get a job, to rent an apartment, all kinds of things that are very fundamental to navigating your personal life,” Rust said.
Equifax had ‘flawed’ process, CFPB says
Equifax processes about 765,000 consumer disputes a month, CFPB said.
Its “flawed” dispute policies and technology failures occurred since at least October 2017, “to the detriment of millions of consumers,” according to the CFPB, which alleged Equifax violated the Fair Credit Reporting Act.
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Equifax settled the allegations to “[turn] the page on the CFPB’s long-running investigation,” a company spokesperson wrote in an e-mail.
The company has invested more than $1.5 billion into technology and infrastructure improvements over the last few years, including “significant changes” to its dispute process and consumer support, the spokesperson said.
“Our Purpose is to help people live their financial best and we know consumers and our customers depend on our data for important financial decisions,” they wrote. “Even one error affecting a consumer is one error too many,” they added.
The $15 million civil penalty follows a lawsuit CFPB filed against another credit bureau, Experian, on Jan. 7, alleging the company conducted “sham” investigations of credit report errors. In a statement on its site, Experian said the lawsuit was “completely without merit” and an “example of irresponsible overreach.”
“Credit bureaus have been sued repeatedly for this kind of conduct,” said Chi Chi Wu, senior attorney at the National Consumer Law Center. “They’re decades-old problems,” she said.
An Equifax data breach in 2017 also compromised the personal information of 147 million consumers, for which the company ultimately agreed to settle for $700 million.
How to have good ‘hygiene’ with credit reports
Consumers should check their credit reports at least once a year, Rust said. The Federal Trade Commission also recommends doing a check before applying for credit, a loan, insurance or a job.
Consumers should ensure they recognize identity information on their credit report like addresses and Social Security numbers, and verify that account information such as debt balances and delinquency status are correct.
“That’s just a good practice of financial hygiene,” Rust said.
Importantly, a credit report differs from a credit score. The latter is a numerical output compiled with information on a consumer’s credit report.
“If you see a sudden change in credit score, that’s a signal,” Rust said.
The three major credit bureaus allow consumers to request a free copy of their credit report once a week. Consumers can request a copy at AnnualCreditReport.com and by calling 1-877-322-8228. (Other sites may charge consumers or be fraudulent, according to the Federal Trade Commission.)
What to do about a credit report error
Smith Collection/gado | Archive Photos | Getty Images
Consumers who see an error on their credit report should lodge a dispute in writing, along with documentation. Send that by postal mail to the credit bureau and request a return receipt, Wu said. Consumers have better odds of resolution by mail than online, she said.
Consumers should also file a complaint with the CFPB and their state attorney general’s office, Wu said.
Consumers can ask that a statement of their dispute be included in their file and in future credit reports, and also ask the credit bureau to provide their statement to anyone who received a copy of their report in the recent past, Wu said.
Consumers who can’t get an error fixed after repeated attempts may wish to consult an attorney, she said.
“Not every error will be worth bringing a lawsuit,” she said. “But if your loan ends up being more expensive because of a credit reporting error, that’s the kind of real harm [for which] you may want to consider litigation.”
They may be able to find an attorney through organizations like the National Association of Consumer Advocates, Wu said.
Hirurg | E+ | Getty Images
With the start of tax season approaching, Democratic and Republican lawmakers are split on the future of Direct File, the IRS’ free tax filing program.
Direct File, which recently expanded to limited taxpayers in 25 states, processed roughly 140,000 returns in 2024 during the pilot that launched mid-season. The pilot covered simple returns in 12 states.
The program has been controversial among Republicans, who have pushed to end the free filing service. The critique has raised questions about Direct File’s future, particularly under GOP control of the White House, Senate and the House of Representatives.
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During his Senate confirmation hearing on Thursday, Scott Bessent, President-elect Donald Trump‘s pick for Treasury secretary, was asked about the future of Direct File.
If confirmed, “I will commit that for this tax season that Direct File will be operative,” said Bessent, without commenting on future years.
Bessent’s comments come one day after more than 130 Democrats, led by Sens. Elizabeth Warren, D-Mass., and Chris Coons, D-Del., voiced support for Direct File.
“Direct File is making the process of interacting with the government more efficient, a goal we all can agree on,” the Democratic lawmakers wrote in a letter to Bessent and Billy Long, Trump’s pick for IRS commissioner.
The pilot program saved consumers an estimated $5.6 million in federal tax preparation fees and could save billions in the future, the Democratic lawmakers wrote. “We disagree with our colleagues who are calling on the President to pull the plug.”
Rep. Adrian Smith, R-Ne., along with 27 House Republicans in December wrote a letter to Trump, urging the president-elect to end Direct File via a day-one executive order.
“The program’s creation and ongoing expansion pose a threat to taxpayers’ freedom from government overreach, and its rollout and structural flaws have already come at a steep price,” the Republican lawmakers wrote.
While the program launched mid-season in 12 states last year for only simple returns, Republicans have continually pointed to the roughly 140,000 returns filed compared to total eligible filers.
The cost for Direct File through the pilot was $24.6 million, the IRS reported in May 2024. Direct File operational costs were an extra $2.4 million, according to the agency.
Over the past year, Republican lawmakers from both chambers have introduced legislation to halt the IRS’ free filing program. In January 2024, attorneys general from 13 states described Direct File as “unnecessary and unconstitutional” in a letter to the Treasury Department.
Burned cars and homes destroyed by the Eaton Fire are pictured in Altadena, California, on Jan. 9, 2025.
Zoe Meyers | AFP | Getty Images
How to know if you qualify
To qualify for serious needs assistance, you need to complete a FEMA application, either by visiting DisasterAssistance.gov or calling 1-800-621-3362.
Other criteria include:
- FEMA must also be able to confirm your identity.
- You, or someone in your home, must be a U.S. citizen, non-citizen national or a qualified non-citizen.
- You must live most of the year in the area affected by wildfires.
- FEMA must confirm you have suffered disaster damage either through a home inspection or documentation.
- Your application must indicate you have been displaced, need shelter or have other emergency costs.
- You must apply while serious needs assistance is available.
To be sure, everyone who applies does not necessarily receive the same size payment.
“Your unique situation determines the amount of assistance you may receive,” FEMA states on its website.
Other federal aid available
Victims of the wildfires may also qualify for other federal aid.
Another FEMA program, displacement assistance, may help cover costs for up to two weeks of housing needs if your home is uninhabitable following a disaster. That money may be used to cover costs to stay in a hotel, with friends and family or elsewhere.
Additionally, federal disaster assistance may also help cover temporary housing, grants for home repairs and essential household items, unemployment payments, low-interest loans for residential losses not covered by insurance and crisis counseling.
Disaster victims should be wary of potential scams promoting access to cash payments from FEMA, the agency warns.
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