Fingerhut Fetti Lawsuit Claims Accounts Were Opened Without Permission

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Fingerhut faces a proposed class action lawsuit that alleges thousands of consumers’ credit scores were damaged when the online retailer opened new Fingerhut Fetti accounts without their permission. 

Was your credit score damaged after a Fingerhut Fetti account was opened without your permission? Take action now.

The 19-page Fingerhut Fetti lawsuit says the retailer, which markets itself to consumers with poor or no credit histories, closed customers’ Fingerhut Advantage accounts in April 2022 and opened new Fingerhut Fetti accounts on their behalf, purportedly as a “business formality” because the company’s agreement with its financing partner was ending. 

The credit reporting lawsuit claims Fingerhut reported the Fetti accounts at issue as new and separate tradelines to credit bureaus, including for people who had not made a transaction with the company in many years, even though the Fetti accounts were essentially continuations of the former Advantage accounts and opened without permission. By opening new accounts and reporting them as such to the credit bureaus, Fingerhut damaged consumers’ credit scores given that the Fetti accounts were documented as new lines of credit, the suit charges.

“This reporting was false,” the class action contends. “It is inaccurate to report an account for a consumer that the consumer never agreed to open. And at a minimum, the date opened for the Fingerhut Fetti account should be the same date that the Fingerhut Advantage accounts were opened.”

According to the lawsuit, Fingerhut has violated the California Consumer Credit Reporting Agencies Act, a state law that prohibits any person from furnishing information on a specific transaction or experience to any consumer credit reporting agency if the person knows or should know the information is incomplete or inaccurate. 

Moreover, the federal Fair Credit Reporting Act mandates that any furnisher who received a dispute from a consumer reporting agency concerning a tradeline “conduct an investigation with respect to the disputed information” and correct any inaccuracies, the filing highlights.

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“Fingerhut has completely failed in these duties, refusing to correct reporting of an account that Fingerhut knew it had no permission to open,” the case alleges, emphasizing that Fingerhut’s marketing “is centered around improving people’s credit.”

Per the suit, Fingerhut encourages consumers to buy products with a Fingerhut credit account in order to build a credit history. The company touts itself as “the leading provider for middle-income consumers seeking to establish, build or rebuild credit through an independent bank partnership” and offers revolving credit and installment loans with monthly payment options, the filing explains.

According to the complaint, the credit reporting industry has taken measures to ensure that consumers with long-standing accounts do not have a score drop when an account is transferred. A crucial piece of information creditors provide credit bureaus is the date an account was originally opened, and it is a typical practice that, when an account is transferred or transitioned, a creditor will report a single account with an integrated payment history and the initial account’s opening date, the lawsuit says.

Though Fingerhut represented to consumers that opening a new Fetti account would help their credit scores, this was false, the complaint relays.

The Fingerhut lawsuit looks to cover all individuals in California for whom Fingerhut automatically transitioned a Fingerhut Advantage account to a Fingerhut Fetti account.

Was your credit score damaged after a Fingerhut Fetti account was opened without your permission? Take action now.