Capital One Class Action Alleges Illegal Credit Checks after Bankruptcy

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In a class action lawsuit, a former Capital One client claims that the financial institution checked her credit after she declared bankruptcy, violating the Fair Credit Reporting Act (FCRA).

In the Capital One credit check class action lawsuit, plaintiff Ophelia Augustine alleges that Capital One submitted an unauthorized credit check to Experian, a credit reporting agency, after Augustine filed for bankruptcy.

She states that in accordance with the Fair Credit Reporting Act, debtors’ debts are closed after they file for bankruptcy, and it is illegal for crediting institutions to submit credit checks on individuals who have filed for bankruptcy.

According to Augustine, she used a loan from Capital One to purchase a car in August 2013. In June 2017, she field for Chapter 7 bankruptcy — “straight bankruptcy” or liquidation. Allegedly, a bankruptcy court notified Capital One of her bankruptcy in September 2017.

The plaintiff says she received a communication from Capital One in October 2017 discharging her from the institution, telling her that the account had been closed, and noting that her debt had been eliminated. She asserts that despite this explicit notification of closure, the bank submitted a credit check to Experian after her bankruptcy. 

The Capital One unlawful credit check class action lawsuit notes that under the FCRA, some loans are non-dischargeable, giving the crediting institution a right to an individual’s information after the individual files bankruptcy, as part of an account review process.

The Capital One FCRA violation class action lawsuit goes on to note that in other cases, a crediting institution and an individual may make a “reaffirmation agreement” even after an individual files bankruptcy, a case that would also give the crediting institution the right to conduct an account review and seek an individual’s information.

According to Augustine, neither situation applied to her case. She states that “there was no account to review so an ‘account review’ inquiry was not a permissible purpose,” suggesting that Capital One violated the FCRA’s guidelines.

The unlawful Capital One credit check class action lawsuit seeks Class certification for U.S. residents whose credit information was obtained by Capital One through similar methods of unauthorized credit inquiries from a number of credit reporting institutions, including Transunion, Equifax, and Experian. The proposed Class would include those consumers whose debt with Capital One had been discharged, account was closed, and whose debt was sold to a third party.

Augustine seeks damages for herself and all proposed Class Members. She seeks actual damages for Capital One’s negligent violations of the FCRA, and the damages of $100 — $1,000 to consumers whose crediting institutions violated the FCRA. She also seeks reasonable compensation for attorneys’ fees.

The plaintiff is represented by Abbas Kazerounian, Mona Amini and Veronica Cruz of Kazerouni Law Group APC, Joshua B. Swigart of Hyde & Swigart APC, and Daniel G. Shay of the Law Office of Daniel G. Shay.

The Capital One Unlawful Credit Check Class Action Lawsuit is Ophelia Augustine v. Capital One Auto Finance Inc., Case No. 3:18-cv-00511-CAB-MDD, in the U.S. District Court for the Southern District of California.