Comenity Capital Bank Sued Over Allegedly Unauthorized Hard Credit Inquiries

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A proposed class action has been filed against Comenity Capital Bank over the lender’s alleged practice of making unauthorized hard inquiries into consumers’ credit files on behalf of PayPal Credit.

Citing potential violations of the Fair Credit Reporting Act, the lawsuit alleges that Comenity requested the plaintiff’s credit report from Equifax on two occasions in relation to purported applications for PayPal Credit that the man says he never submitted. According to the complaint, the bank falsely represented that it had a current credit relationship with the plaintiff and, through Equifax, accessed his “highly confidential and sensitive personal information” without his authorization or consent.

The lawsuit argues that the defendant’s actions constitute “a pattern of wrongful and unlawful behavior” that has potentially affected thousands of consumers. The case claims these unauthorized inquiries unfairly lower consumers’ credit scores and constitute an invasion of privacy.