Equifax hit with antitrust class action over work verification services
By Mike Scarcella
May 29 (Reuters) -Data analytics giant Equifax EFX.N has been accused by a pair of home mortgage lenders of monopolizing the market for electronic income and employment verification services, leading to higher prices.
Greystone Mortgage and First Financial Lending filed the proposed class action in Philadelphia federal court on Tuesday, alleging Equifax had a “stranglehold” over a verification process that is a critical part of consumer finance.
Lenders, property managers and others rely on their quick ability to electronically verify an applicant’s income and employment for mortgages, car loans and rental apartment agreements, according to the lawsuit. Manually calling employers can be slow.
The lawsuit alleged Equifax, through its Equifax Workforce Solutions unit, has violated antitrust law through exclusive contracts and buying up would-be competitors. The industry domination, according to the lawsuit, has allowed Equifax to charge for its services “far higher than a competitive market would bear.”
Atlanta-based Equifax and lawyers for the plaintiffs did not immediately respond to requests for comment.
The case was brought on behalf of a proposed class of at least tens of thousands of purchasers of Equifax’s income and employment services.
The lawsuit said income and employment verification increasingly has driven revenue for Equifax,which is best-known for providing credit history reports. The lawsuit said profit from its verification business was now nearly $2 billion annually.
Equifax’s multiyear, exclusive agreements with payroll software providers and large employers have denied competitors’ access to essential data inputs, “making it impossible for rivals to build databases of sufficient size and scale,” the lawsuit claimed.
Equifax “spent billions of dollars acquiring companies that might present a risk of competition to its monopoly," the plaintiffs said.
The lawsuit demanded unspecified monetary damages, and it seeks an injunction to stop Equifax’s alleged anti-competitive practices.
The case is Greystone Mortgage Inc and First Financial Lending LLC v. Equifax Workforce Solutions LLC and Equifax Inc, U.S. District Court for the Eastern District of Pennsylvania, No. 2:24-cv-02260.
For plaintiffs: Katie Beran and Brian Ratner of Hausfeld; Bruce Gerstein and David Rochelson of Garwin Gerstein & Fisher; and Joshua Grabar of Grabar Law Office
For defendant: No appearance yet
Read more:
Credit bureaus can’t bar NJ law requiring foreign language reports, US judge rules
FICO loses bid to dismiss antitrust claims over credit-scoring market
Reporting by Mike Scarcella
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
