Class action looms for Equifax regarding credit score errors
Equifax, the second-biggest global credit bureau, was hit with a proposed class-action lawsuit after a report that it provided inaccurate credit scores on millions of U.S. consumers looking for loans.
The suit, filed Wednesday in federal court in Atlanta, alleges violations of the Fair Credit Reporting Act. It seeks financial damages and a court order requiring Equifax to notify all customers who were impacted by the score-reporting glitch, which The Wall Street Journal reported Tuesday.
“We believe that many of the people impacted — some of whom may still be unaware of what happened — suffered severe financial consequences,” John Morgan and John Yanchunis, the attorneys who filed the suit, said a statement.
Equifax said some consumer credit scores were changed because of a computer error that has since been rectified.
A server “coding issue” led to the inaccurate scores, the consumer credit-reporting company said Tuesday in a statement posted on the web. The Atlanta-based company didn’t say how many consumers were affected.
The Wall Street Journal reported Equifax provided inaccurate credit scores on millions of U.S. consumers looking for loans, citing bank executives and people familiar with the matter it didn’t identify.
Robinhood cutting 23% of its workforce; revenue sinks 44%
Just months after cutting 9% of its workforce, Menlo Park-based Robinhood on Tuesday announced plans to lay off an additional 23%.
The latest cuts, which will affect 780 employees, continue a massive free fall for the once high-flying online brokerage. In a separate development Tuesday, the state of New York hit the company with a $30 million fine.
In a blog post on the company’s website, Robinhood CEO Vlad Tenev said the “deterioration of the macro environment” — notably decades-high inflation coupled with a cryptocurrency crash — has reduced the company’s customer trading activity and assets under custody.
In its second-quarter earnings report, also released Tuesday, the company showed a 44% drop in revenue from a year ago. Robinhood’s monthly active users in June decreased by more than 7 million, or 34%, and that assets under custody have dropped by more than $37 billion, or 37%, from the second quarter of last year.
The layoffs will affect employees across all functions of the company, with operations, marketing and program management positions being the hardest hit, he said. The company planned to notify all employees via email and Slack on Tuesday with their status as well as resources if they were affected.
U.S. unemployment claims remain near five-month high
Applications for U.S. unemployment insurance fell, though remained near January levels, suggesting that labor market conditions are moderating.
Initial unemployment claims decreased by 2,000 to 231,000 in the week ending June 25, Labor Department data showed Thursday. The median estimate in a Bloomberg survey of economists called for 230,000 applications.
Continuing claims for state benefits fell slightly to 1.33 million in the week ending June 18. Jobless claims have been hovering in the 230,000 range for the past four weeks, a level not seen since the beginning of the year when the Omicron variant was at its peak. Demand for labor is expected to weaken further as interest rates rise and firms anticipate a potential recession.
In the past week, companies including Netflix and Tesla have laid off hundreds of employees amid concerns about the economic outlook.
The jobless claims fourweek moving average, a measure which smooths out some of the volatility in the series, has risen in 11 of the past 12 weeks and now stands at 231,750.