Home mortgage lenders Greystone Mortgage and First Financial Lending accused Equifax (EFX.N) of monopolizing the market for electronic income and employment verification services, resulting in higher prices.
They filed the proposed class action in Philadelphia federal court, alleging that Equifax has a “stranglehold” over a verification process crucial to consumer finance.
According to the lawsuit, lenders, property managers, and others rely on the quick ability to electronically verify an applicant’s income and employment for mortgages, car loans, and rental apartment agreements, as manual verification by calling employers can be slow.
The lawsuit accused Equifax’s Workforce Solutions unit of violating antitrust laws through exclusive contracts and acquiring would-be competitors, allowing it to charge for its services “far higher than a competitive market would bear.”
Neither Atlanta-based Equifax nor the plaintiffs’ lawyers immediately responded to requests for comment.
The lawsuit aims to represent a proposed class of at least tens of thousands of purchasers of Equifax’s income and employment services. It noted that income and employment verification has increasingly driven revenue for Equifax, which is best known for providing credit history reports, with profits from its verification business now approaching $2 billion annually.
Denial of data to competitors
The lawsuit claimed that 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 plaintiffs also alleged that Equifax spent billions of dollars acquiring companies that might present a risk of competition to its monopoly.
The lawsuit seeks unspecified monetary damages and an injunction to stop Equifax’s alleged anti-competitive practices.
The case, Greystone Mortgage Inc and First Financial Lending LLC v. Equifax Workforce Solutions LLC and Equifax Inc, is filed in the U.S. District Court for the Eastern District of Pennsylvania, No. 2:24-cv-02260.
Plaintiffs are represented by Katie Beran and Brian Ratner of Hausfeld; Bruce Gerstein and David Rochelson of Garwin Gerstein & Fisher; and Joshua Grabar of Grabar Law Office.
