Class Action Claims PrimeLending Pulls Potential Borrowers’ Credit Reports Without Consent

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A proposed class action alleges PrimeLending has violated federal and state laws by obtaining consumers’ credit reports without consent and “under false pretenses.”

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The 35-page lawsuit says the Dallas-based mortgage lender represents to prospective borrowers that it will perform only a limited credit inquiry that does not affect their credit score—a “soft” pull—before allowing them to view their potential refinancing options and interest rates. In addition, PrimeLending promises that it will perform a full “hard” pull credit inquiry only after a borrower has applied for a specific financing plan, the filing relays.

Despite these representations, PrimeLending “knowingly and willfully” procures hard credit inquiries before any application has been made and without first receiving a prospective borrower’s permission, the case contends. The filing stresses that a hard pull can cause an individual’s credit score to drop by up to five points and negatively impact their creditworthiness.

The plaintiff, a California consumer, says her mother spoke on the phone with a PrimeLending loan specialist in December 2022 to express interest in getting more information about potential mortgage rates. Shortly after, the plaintiff received an email from the agent asking her to provide her income, tax returns, bank statements and other financial information to obtain pre-qualification rates, the complaint says.

After submitting this information, the plaintiff was notified on January 17 that PrimeLending had performed a hard inquiry of her and her mother’s credit reports, even though the women never consented to have their credit information accessed and explicitly told the loan specialist that they were not seeking loan approval, the lawsuit claims.

The suit states that PrimeLending’s hard inquiry remains on the plaintiff’s and her mother’s credit reports and has damaged their creditworthiness.

According to the suit, PrimeLending’s “routine and systematic” practice of performing unauthorized hard pulls violates the federal Fair Credit Report Act (FCRA) and the California Consumer Credit Reporting Agencies Act (CCRAA), both of which prohibit creditors from obtaining credit reports under false pretenses. 

Under the FCRA and the CCRAA, lenders are also prohibited from procuring consumer reports unless they have a “permissible purpose,” such as when a consumer initiates a credit transaction with the creditor, the case relays.

“It is well established that merely inquiring about the possibility of a future transaction, or shopping for rates, is insufficient to satisfy the requirement of the FCRA for a creditor to initiate the kind of full credit inquiry that is allowed when a consumer has initiated a transaction,” the complaint contends. 

The lawsuit looks to represent anyone who, in the past two years, had a hard credit inquiry procured by PrimeLending when the company’s records reflect consent for only a soft pull.

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