Class Action Lawsuit Claims Barclays Bank Delaware Fails to Adequately Explain Credit Revocations

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A proposed class action lawsuit claims that Barclays Bank Delaware has unlawfully failed to provide timely written notices that sufficiently explain the reasons for revoking customers’ credit accounts.

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The 10-page lawsuit states that, according to the Equal Credit Opportunity Act (ECOA), a creditor must provide a customer with written notice of any adverse, credit-related action and cite the specific reasons why the action was taken.

The complaint alleges that Barclays Bank Delaware has repeatedly failed to both specify its reasons for revoking customers’ credit accounts and inform customers of their right to a statement of specific reasons.

The lead plaintiff, for example, had his credit account revoked on August 15, 2023, and received a letter from the bank, dated the same day, notifying him of the revocation, the filing says. However, the only explanation provided for this action in the written notice, according to the suit, was that the man’s account had been closed due to “[n]egative public record information identified.”

The filing argues that this “vague, boilerplate” explanation—and similar vague explanations Barclays Bank Delaware has allegedly provided other consumers—is inadequate and unhelpful, and does not align with the ECOA’s provision that notices containing specific reasoning are meant to both provide “valuable educational benefit” to consumers and allow the consumer to correct their creditor “where the creditor may have acted on misinformation or inadequate information.”

Per the ECOA, a creditor has 30 days from the date of credit revocation to provide an accountholder with specific reasoning and notify the consumer of their right to a specific reason, which the complaint alleges Barclays Bank Delaware failed to do. Instead, the lawsuit says, the bank only ever issued the initial closure notice containing inadequate reasoning attached, in violation of the ECOA.

The Barclays Bank Delaware class action lawsuit seeks to represent anyone who, between December 7, 2020 and the date of class certification, received a letter from Barclays Bank that gave “[n]egative public record information identified,” or other similarly unspecific language, as the only reason or reasons for the revocation of a credit account.

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