American Express class action alleges company submits hard credit inquiries despite contrary representations

American Express class action overview: 

• Who: Plaintiff Carla Flannery filed a class action lawsuit against the American Express Co.
• Why: American Express said it would only do a soft credit check until a user was approved and accepted a credit card offer, but did a hard credit check instead, the lawsuit claims.
• Where: The American Express hard credit class action was filed in federal court in California.

American Express is facing a class action lawsuit alleging the company makes hard credit inquiries on new applications when it claims it only makes soft inquiries until the new card is finalized.

That means a potential customer’s credit can be negatively affected even if their credit application is denied, the American Express hard credit class action claims.

A soft credit pull is not visible to third parties on a credit score, while a hard credit pull does have an impact.

“Soft inquiries include inquiries made when a consumer checks his or her own credit report, inquiries made by businesses with which the consumer already does business, such as a mortgage servicer reviewing the status of the consumer’s account and, as discussed above, and inquiries made by credit card companies or insurance companies to make firm offers of credit even when no transaction has been initiated by a consumer,” the class action says.

American express falsely marketing credit checks, won’t remove inquiries from credit reports, lawsuit claims

American Express marketed its cards by telling customers they would know if they were approved without an impact on their credit score. The plaintiff sent four credit disputes to the credit reporting agencies, and none was successful.

American Express is accused of obtaining credit reports without permission and obtaining consumer information under false pretenses.

American Express is also facing a lawsuit from an Arizona woman alleging it violated the law when it contacted her at least 10 times trying to collect debt from a woman she says she has never heard of. 

Do you use an American Express credit card? Let us know in the comments.

The plaintiff is represented by Yitzchak Zelman of Marcus and Zelman LLC.

The American Express class action lawsuit is Flannery v. American Express Co., Case No. 2:23-cv-07931, in the U.S. District Court for the Central District of California Western Division.

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