A federal judge has granted preliminary approval to a $100 million settlement in a class action lawsuit against Equifax alleging the company miscalculated credit scores for approximately 4 million Americans. The settlement fund is designated as non-reversionary, meaning any unclaimed funds will not return to Equifax. This marks the largest settlement in history related to the Fair Credit Reporting Act (FCRA).

The lawsuit, In re: Equifax Fair Credit Reporting Act Litigation (Case No. 1:22-cv-03072), received preliminary approval from the Honorable Leigh Martin May in the U.S. District Court for the Northern District of Georgia on August 17, 2026. Gibbs Mura serves as class counsel alongside co-counsel Girard Sharp, DiCello Levitt, and Caplan Cobb. A final fairness hearing is set for January 27, 2026.

Background of the litigation

The litigation centers on a coding error at Equifax that reportedly misreported lowered credit scores for consumers applying for mortgages, auto loans, or credit cards between March 17 and April 6, 2022. According to the lawsuit, scores were sometimes lowered by over 20 points, a shift sufficient to cause lenders to deny credit or charge higher interest rates. The plaintiffs alleged Equifax was reckless in relying on antiquated legacy systems and inadequate testing protocols, resulting in violations of the FCRA.

What the numbers show

The settlement structure indicates a potential payout of $25 per class member based on the $100 million fund allocated for approximately 4 million affected individuals. However, actual payments will depend on the number of valid claims filed and the administrative costs deducted from the total fund. The non-reversionary nature of the fund ensures that the full financial burden remains with Equifax regardless of the final claim rate, removing the possibility of the company reclaiming surplus capital.

Gibbs Mura partner David Berger, court-appointed co-lead counsel, highlighted the accountability aspect of the resolution. Berger previously helped achieve a $1.5 billion settlement with Equifax related to a 2017 data breach affecting 147 million consumers.

Equifax Inc. reported second quarter 2026 revenue of $1.70 billion, an 11% increase compared to the prior year, beating the analyst consensus estimate of $1.696 billion. On a local currency basis, revenue increased 10%. The growth was driven by strong performance across its Workforce Solutions and U.S. Information Solutions segments, with U.S. Mortgage revenue surging 40%. Despite the earnings beat, the company narrowed its full-year 2026 guidance, citing macroeconomic challenges and elevated inflation disproportionately affecting lower-income and subprime consumers.

Adjusted earnings per share (EPS) increased 13% year-over-year to $2.25, topping the analyst consensus estimate of $2.20. Adjusted EBITDA margin was 32.5%, unchanged from a year earlier. Net income attributable to Equifax was $183.9 million. The company doubled its AI-driven cost reduction target to $150 million for the 2026-2028 period and returned $366 million to shareholders through share repurchases and dividends during the quarter.

Strategic Acquisition

Equifax signed a definitive agreement to acquire Círculo de Crédito, the fastest growing credit bureau in Mexico, for an enterprise value of $750 million. The deal is expected to close in the fourth quarter of 2026. Chief Executive Officer Mark Begor stated the acquisition fits within the company's balanced capital allocation framework.

Segment Performance

Workforce Solutions revenue totaled $705.4 million, up 7% year-over-year. This growth was led by Verification Services, which increased 7% to $607.6 million, driven by high double-digit growth in Talent Solutions and Consumer Lending. The segment's operating margin was 44.9%.

U.S. Information Solutions (USIS) revenue rose 17% to $611.6 million. U.S. Mortgage revenue surged 40%, while total Mortgage revenue increased 25%. Online Information Solutions revenue grew 19% to $545.4 million. USIS reported an operating margin of 22.5%.

International revenue reached $383.1 million, an 8% increase on a reported basis and 4% on a local currency basis. Asia Pacific revenue grew 17% reported, while Canada revenue increased 6%. The International segment achieved an operating margin of 12.1%.

Financial Outlook

Equifax narrowed its full-year 2026 adjusted EPS guidance to $8.39 to $8.69 from a previous range of $8.34 to $8.74. The company tightened its full-year revenue outlook to $6.71 billion to $6.78 billion from $6.685 billion to $6.805 billion. For the third quarter of 2026, Equifax expects reported revenue between $1.680 billion and $1.710 billion and Adjusted EPS between $2.15 and $2.25 per share. Executives noted that higher mortgage rates have weakened industry origination activity, and the company expects the mortgage market to remain soft in the second half.

Analyst Ratings

Morgan Stanley analyst Toni Kaplan maintained Equifax with an Overweight rating and lowered the price target to $225 from $243. Baird analyst Jeffrey Meuler maintained Equifax with an Outperform rating and lowered the price target to $232 from $245. RBC Capital analyst Ashish Sabadra maintained Equifax with an Outperform rating and lowered the price target to $194 from $222. Barclays analyst Manav Patnaik maintained Equifax with an Equal-Weight rating and lowered the price target to $200 from $215. Needham analyst Kyle Peterson maintained Equifax with a Buy rating and lowered the price target to $245 from $265. Wells Fargo analyst Jason Haas maintained Equifax with an Overweight rating and lowered the price target to $212 from $220.