A proposed class action claims C2 Financial Corporation and Partners Credit and Verification Solutions LLC (PCVS) have accessed consumers’ credit reports with neither permission nor any permissible purpose to do so.
The suit’s three named plaintiffs claim C2 Financial, a residential mortgage broker, and PCVS, a credit services provider, have executed unauthorized credit inquiries months after consumers’ homes were refinanced despite lacking any permissible reason for doing so as defined by the Fair Credit Reporting Act (FCRA).
“Defendants acted willfully in a deliberate manner or in reckless disregard of the obligations imposed by the FCRA, and the rights of applicants and employees,” the complaint charges.
The FCRA specifies the purposes for which an entity may obtain a consumer report, and credit bureaus require from those who request a consumer report a certification that it will only be used for a permissible purpose, the lawsuit says.
According to the case, however, the defendants have improperly requested the plaintiffs’ consumer reports from all three major credit bureaus without any action on the individuals’ parts to initiate a credit transaction. Though the plaintiffs respectively refinanced their homes with C2 months earlier, they initiated no new transactions or relationships with the defendants at the time the credit inquiries were made, the lawsuit says.
“Defendants were not authorized to initiate any credit inquiry for Plaintiffs, and upon information and belief for the Class Members, after the initial inquiry (in Plaintiffs’ case for the purpose of a single refinance transaction),” the complaint argues.
Per the lawsuit, the defendants were well aware that their requests for the plaintiffs’ consumer reports “fall outside the scope of any permissible use or access” under the FCRA. According to the case, C2 and PCVS had no procedures in place that were “reasonably adapted” to avoid FCRA violations.
The plaintiffs claim they suffered injuries in the form of invasion of privacy and a negative impact on their credit scores, as well as an increased risk that their sensitive information could be subject to a data breach.
The lawsuit looks to represent all California residents for whom, within the past five years, the defendants ran two or more consumer credit report inquiries within a two-year period.
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