Capital One Class Action Says Bank Violates Credit Report Laws

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

A class action lawsuit filed on January 18 against Capital One Bank alleges that the credit card giant uses adverse information in customers’ credit reports against them without disclosing to those customers what the information is or where it came from.

The complaint asserts that this information is required to be provided to consumers by the federal Equal Credit Opportunity Act (ECOA), and state versions of the same.

“Disclosure of the specific reasons for the adverse action, including a true representation regarding the source of the adverse information, is vital so that credit reporting errors that originate at the source can be corrected, and so the person knows the specific person who furnished information about them to the creditor,” the class action contends.

Plaintiff Albert Douglas says he applied for a home equity loan from Capital One in the summer of 2016 in the amount of $45,000. Douglas states that he is a disabled veteran who is retired and on a fixed income.

Douglas claims that he was pre-approved for the loan after providing his retirement income information and giving permission to Capital One to access his credit reports. However in July of 2016, Douglas says he received a “Statement of Credit Denial, Termination or Change” informing him that his application was being denied.

That notice told Douglas that he was being denied because his credit reports disclosed that he had gone through bankruptcy, but Douglas claims this information is incorrect; he has not filed for bankruptcy in the past 10 years.

“Further, Experian and Equifax did not list a bankruptcy in his credit file and the reports that he had seen before receiving this notice,” according to the complaint.

Douglas states that he contacted Capital One about the error, and an employee confirmed the error but said that the loan was being denied because of information received from third party Lexis Nexis. Douglas wrote a letter to Capital One to try get more details, but to date the bank has not responded.

Douglas continued to track down the reason for his loan denial by contacting Lexis Nexis. That company allegedly told him they may obtain bankruptcy information from a separate third party, Accurint.

When Douglas received his report from Accurint, it stated that he had gone through a bankruptcy in 2005 and 2006. Based on this information, the complaint asserts that Capital One uses information from Accurint without properly informing customers of this data source, in violation of the ECOA.

The credit reporting lawsuit requests certification of a Class of all persons in the U.S. who have applied for a loan with Capital One in the past five years, who the company provided an “adverse action notice” without mentioning Accurint.

The complaint also requests a subclass of Virginia residents with the same criteria, alleging violations of Virginia state law. The class action seeks restitution, statutory damages of $10,000 per Class Member, and an injunction requiring Capital One to send correct adverse action notices in the future.

Douglas is represented by Kristy C. Kelly and Andrew J. Guzzo of Kelly & Crandall PLC and Leonard A. Bennett, Craig C. Marchiando and Elizabeth Hanes of Consumer Litigation Associates PC.

The Capital One Bank Credit Reporting Class Action Lawsuit is Albert Douglas v. Capital One Bank NA, Case No. 3:17-cv-00043, in the U.S. District Court for the Eastern District of Virginia, Richmond Division.