Unfortunately, Equifax holds the worst reputation among all credit bureaus for a good reason.
Equifax is a widely known credit reporting agency that operates in the United States of America alongside Experian and TransUnion. These agencies compile credit records for over 200 million Americans in which information about credit, loans, credit cards, delayed and missed payments, bankruptcies as well as other related credit information is stored. These credit reports together with the scores they produce are relied on by lenders when deciding to give credit and loans to consumers. So these agencies have an incredible sum of personal and financial data at their disposal.
Sadly, Equifax has become the ‘least of the three wise’ major credit bureaus and the one surrounded with the most issues. They are not immune to controversies such as complaints, scandals, and data breaches, which have rightfully raised questions about their business practices over the years. Below are some of the reasons why Equifax is the least favored in this industry by its customers
credit reporting agencies have been rated in the past as having a high incidence of inaccuracies in credit reports.
Topics that have been a subject of complaints over the years touch on errors and inaccuracies on the Equifax credit report. Customers have said that they have difficulty having errors corrected, for example, accounts such as loans or credit cards consumers did not open are reported, or damages involving identity theft are not corrected adequately. Consumers themselves have to screen and object to errors if they are to be corrected. More importantly, the management of Equifax has been quite cumbersome, especially when handling investigations and correction of records, an aspect that has made many customers extremely annoyed.
Data Breaches that Revealed Sensitive and Personal Details of Individuals
There has been an ongoing problem of cybersecurity that Equifax has faced in the past. The agency in question also revealed the largest data breach of 2017 where the hackers gained access to the private information including SSNs of about 145 million consumers. This is approximately equal to half of the entire US adult population. This was one of the biggest and most significant data breaches of the time not only in terms of the number of records stolen but also due to the classification of the information leaked.
Equifax was criticized for extremely weak security measures that led to the breach, and even worse handling of the situation that was filled with misinformation, delays, and attempts to shield the company from legal ramifications and tie consumer claims to arbitration. They received major backlash online for their poor cyber safety measures as well as lack of protection over something as basic as consumers’ credit information. This was very bad from a public relations angle and resulted in the resignation of the CEOs. It is therefore apparent that for many Americans loss of trust in Equifax was a permanent one as far as its reputation was concerned.
Charging Consumers Extra Fees for Accessing Their Credit Reports
Another negative event that may negatively affect Equifax’s reputation concerns multiple complaints received throughout the years that Equifax overcharges and engages in ‘‘price gouging’’ consumers for issuing credit reports or for enrollment in credit monitoring services. One is to be able to get to their report for free which in most cases includes an email with a link to a trial version with hooks into paid subscriptions.
Consumers have filed multiple lawsuits against the company for its practice of unapparent billing schemes. Federal regulators have also penalized Equifax millions following what the company described as false marketing of free credit scores and reports. When it comes to fee charges, a large number of consumers claim that Equifax cares more about milking consumers for all it can get, instead of informatively and honestly assisting them in comprehending credit.
Forced arbitration clause
Equifax was also severely criticized for how it sought to immunize itself against legal action following the 2017 breach through forced arbitration. But hidden in the small font, which the users had to accept to handle credit freezes, Equifax attempted to limit consumers' rights to sue and have class action suits. This attempted to ‘chase’ victims into hidden arbitrations where there was no judge no jury, and no possibility of an appeal.
Luckily, members of the public and politicians pressured Equifax into canceling this clause as well. However, the fact they attempted this maneuver in the first instance left many fuming as a sneaky approach to avoid the legal consequence of negligence. It only reinforced the notion of Equifax as a shameless, money-hungry company with no qualms about putting consumers’ data at risk and disregarding their privacy.
The Need for Balancing Consumer Interest and Business Partners
Credit bureaus such as Equifax are multi-functional organizations that provide all-around services to not only individuals but also to banks, credit companies, or any other related financial institutions that get access to credit information. This dualism can be seen to lead to circumstances that involve conflicts of interest where the duty being owed to consumers is defeated by the business customers.
Through the years, consumer advocacy groups have accused Equifax of prioritizing the interests of its corporate clients as well as partners regarding data demands, rather than the reasonable and appropriate duties of protection, accuracy, and fairness owed to average customers. This is evident through aggressive monitoring of consumers’ credit history, not excluding the sale of the consumers’ data to marketers and other stakeholders. The credit bureau industry has been criticized for lacking adequate rules to ensure that consumers do not have civil liberties suppressed in favor of commercial gain.
By several standards, Equifax continually lags behind its counterparts concerning integrity, responsibility, and ethical standards when it comes to protecting personal consumer information. And yet, while no credit bureau is devoid of flaws or can escape some measure of scrutiny, Equifax continues to struggle with a crisis that is both the most active and the most serious. To restore what can be considered broken, deep internal changes at Equifax are needed to improve cybersecurity, transparency, and fraud, as well as legal responsibility and conflicts of interest.
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