Class Action Claims Capital One Failed to Provide Enough Info Before Closing Customers’ Credit Accounts

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A proposed class action claims Capital One Bank (USA), N.A. has violated the Equal Credit Opportunity Act (ECOA) by failing to provide a consumer with requisite documentation outlining the specific reason as to why his credit card account was closed.

The plaintiff, a Georgia resident, claims Capital One issued him a credit card and then in September 2020 closed his credit account without providing “a specific statement of reasons,” including the source of the information on which the closure was based. As a result, the plaintiff was unable to fix potential errors in the information provided to Capital One and “clear his name,” the 21-page suit contends.

“By refusing to provide Plaintiff and members of the putative class the specific reasons for adverse action, Capital One has denied them of their private statutory right to receive such information, of the educational benefit of such information, and the ability to engage in the informed use of credit,” the complaint states. “In addition, by refusing to provide Plaintiff and members of the putative class the specific reasons for adverse action, including the source of such information, Capital One has denied them of their due process right to correct possible errors.”

The plaintiff says he received on September 1, 2020 a letter from Capital One informing him that the bank was closing his credit account. Per the suit, the letter failed to provide a specific statement of reasons as to why the plaintiff’s account was being closed, a requirement of the ECOA. Instead, the letter simply stated, according to the lawsuit, that “Capital One has discovered past or present legal action involving an individual or entity associated with the account. Unfortunately, it can’t be reopened, and we are not able to offer additional information about this decision.”

The lawsuit claims Capital One’s explanation was false and “not sufficiently specific” to inform the plaintiff of the exact problem with his account. Moreover, although the bank stated it was unable to provide more information about its decision to close the account, this statement was untrue, the case argues.

“Despite what the letter said, Capital One was able to offer additional information about its decision to close the account,” the complaint alleges, charging that the bank was “simply unwilling to do so.”

According to the suit, the plaintiff called Capital One several times to inquire about the “mysterious and unilateral termination” of his account despite the letter’s insistence that such efforts would be futile. Upon calling the bank, the plaintiff was informed that his account had been closed because Capital One had determined that he “was a party to criminal proceedings for sex trafficking and possession of a firearm during the commission of a felony, or similar offenses.” The case states, however, that the plaintiff is not and has not been the subject of any such proceedings.

Although the plaintiff informed Capital One that the information on which it had based his account closure was not true, the bank refused to reopen his account or disclose the source of the information, according to the suit. The plaintiff says he has reviewed his credit reports and other resources to determine the source of the misinformation but has been unable to find any related information attributed to him. 

Per the case, the plaintiff has been “substantially harmed and damaged” by Capital One’s closing of his account “without providing justifiable reasons” or enough information for the plaintiff to correct errors in the data on which the bank relied.

The lawsuit claims other accountholders have likely been affected by Capital One’s alleged misconduct given the letter sent to the plaintiff was a generic form letter and the bank is one of the largest credit card issuers in the U.S.

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