Capital One Failed to Provide Specific-Enough Info About Credit Account Closures, Class Action Says

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A Massachusetts consumer claims in a proposed class action lawsuit that Capital One violated federal and state law by terminating his three credit accounts without providing certain required information about its decision to do so.

Per the 15-page case, the federal Equal Credit Opportunity Act requires creditors to provide borrowers or applicants with written notice of the “specific reasons” for an adverse action that was taken with regard to their credit.

Moreover, the Massachusetts Consumer Credit Reporting Act stipulates that when credit is denied or terminated because of information contained in a consumer report, the user of the report must, within 10 business days of its decision, send the consumer written notice containing the name, address and phone number of the consumer reporting agency who provided the report.

According to the case, Capital One “unexpectedly” closed the plaintiff’s three credit accounts in September 2021 without providing “specific reasons” for the closures or information about the identity of the consumer reporting agency upon whose report the bank relied in making its decision.

Per the suit, the plaintiff received in September three letters from Capital One for his three credit accounts that each stated the bank had closed the account at issue because of “adverse past or present legal action involving an individual or entity associated with the account.”

Because the letters contained no “justifiable reasons” for the account closures and insufficient details about the source of the adverse information, the plaintiff was denied his right to correct possible errors, the complaint alleges.

The suit says the plaintiff wrote to Capital One in early December to inquire about the “past or present legal action” referenced in the letters and the source of that information. In its reply, Capital One “provided an illogical and irrelevant response” and shed no further light on the source of the information on which it relied when terminating the plaintiff’s accounts, the case relays.

The plaintiff says that although he has reviewed his credit report and “other sources” in an attempt to find the basis of Capital One’s misinformation, he has been unsuccessful. Per the case, the man has been damaged in the form of decreased credit scores, loss of credit, out-of-pocket expenses, lost time in searching for the misinformation, and mental anguish and stress.

The suit looks to cover Massachusetts residents who, within the past two years and until the lawsuit is resolved, received an adverse action notice for a Capital One credit account issued for personal, household or family purposes based on information from a consumer reporting agency where Capital One failed to provide, within 10 business days, written notice of the identity and contact information of the consumer reporting agency who issued the report.

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