At Darr Law, we handle a wide variety of cases, mostly in the consumer-protection arena (and specifically regarding consumer finance).
One of the common claims we help clients with is for violations of the Equal Credit Opportunity Act when credit accounts are closed or credit applications rejected. The ECOA and its regulations provide that if a credit account is closed (or application denied), then the creditor needs to explain why it was closed (or why the application was denied). And the explanation needs to be specific, reasonably accurate, and complete.
Below are some examples where banks have failed to provide a sufficient reason (in my opinion), and where I think an affected person has a claim under the Equal Credit Opportunity Act. If I list something here, it means that I think the conduct is actionable (and maybe have litigated the specific issue before and gotten a recovery). Inclusion in this list is not a guarantee of recovery if you’re affected and decide to file a lawsuit (whether by yourself, with another lawyer, or with Darr Law LLC).
Lastly, by making this list, I’m not trying to solicit business--I’m trying to show consumers examples of activity I’ve witnessed that I think is actionable. If you think you have a claim, you might want a lawyer to bring your claim. And if you want a lawyer you should, of course, feel free to contact me at Alex@Darr.Law. Darr Law would be happy to evaluate your claim and discuss a potential representation.
I have a great big disclaimer on the website. Please read it. If any links are dead below, please let us know, and we will do our best to update that list.
Lastly, if your credit card accounts are closed by a creditor/bank, please know that you may have other claims you can pursue related to, for example, annual fees paid or rewards earned. Darr Law is very experienced with many different claims affecting consumers in their banking relationships, and we’re happy to discuss your potential case more fully. Please email (Alex@Darr.Law) or contact us through this site to discuss further.
Citi
Throughout 2015 and 2016, Citi sent out letters indicating that accounts were closed, but not giving any reason. Here’s a sample letter.
More recently, Citi has changed its efforts to comply with the ECOA. Citi will send a letter saying accounts are closed and indicating that you can ask for the reason you were closed. You have to ask within 60 days. If you ask for the reason, Citi has a legal obligation to provide the requested specific reason for the closure. If they fail to do so, there may be a claim.
American Express
Recent closure letters (or closure emails) we’ve seen will simply state “not used for intended reason.” In my opinion, that’s too vague to satisfy the law. A person who receives that letter has a good potential claim.
Additionally, we’ve seen a few instances where American Express’s closure letters don’t include specific language required by the ECOA about non-discrimination. This also gives rise to a potential claim.
Here’s a sample letter with both of these issues. Sample letter. In this sample letter, you see that the reason given is “not used for intended reason.” That, alone, I contend is a violation of the law. Independently, there is a block of required information about your rights as a consumer that is absent from this example notice.
US Bank / Fidelity / Elan
Recently, there have been increased reports of closures from US Bank and Elan Financial (one of their more popular products is the Fidelity Credit Card, which pays 2% cashback).
The Bank(s) are closing credit card accounts. When they close the account(s), they send a letter that simply says that the account will be closed (or is closed immediately), and there is no explanation included.
Discover
A number of individuals were closed by Discover for sharing Authorized User spots on their cards. When they were closed, the affected persons received closure letters like the below sample. The reason is not sufficiently specific, in my opinion. If you were closed for piggybacking with Discover, you probably got a letter like this one.
Additionally, I’ve seen some Discover closure letters that provide no reason for closure at all. An individual who receives such a letter almost certainly has an ECOA claim.
Barclays
Barclays often closes accounts with the proffered reason of “Your History of Account Usage.” I’ve filed a number of claims arguing that this language is too vague, and have had multiple arbitrators agree that the reason is not specific enough under the law, giving rise to a potential claim.
Chase
Chase will close letters and justify the decision on an “affiliates” decision to close your account. If you received a letter like this, you might have a claim!
It’s worth repeating that every case is going to be unique, and the Equal Credit Opportunity Act, like nearly every statute has exceptions and limitations that might play out in your case. For this reason, I always encourage my current clients and potential clients to have account closures or application denials reviewed by an experience attorney to make sure that their federal civil rights have been respected in the process.