By Melissa Daniels
Law360, Los Angeles (July 10, 2017, 4:31 PM EDT) — A California federal judge signed off Friday on a
$1.645 million settlement between Bank of America NA and more than half a million former customers over alleged Fair Credit Reporting Act violations stemming from unauthorized soft credit report inquiries.
The operative complaint accused Bank of America of pulling credit reports without customers’ permission after they had filed for bankruptcy and had debts to the bank discharged. The parties reached the settlement after a mediation session in July of last year, according to court records.
U.S. District Judge Vince Chhabria signed off on the deal Friday as fundamentally fair, reasonable, adequate and in the best interests of the class members, “especially in light of the benefits to the settlement class members, the strength and weaknesses of the plaintiff’s case, the complexity, expense and probable duration of further litigation, the risk and delay inherent in possible appeals.”
The settlement class of more than 537,000 consumers includes anyone who had their credit report pulled by Bank of America or its subsidiary FIA Card Services since August 21, 2010, through Friday after their accounts were closed with a zero balance, discharged in bankruptcy or sold to a third party.
Bank of America denies all the claims and had asserted that the soft credit pulls weren’t unlawful, according to settlement documents.
Robert Pastor, who filed the putative class action back in 2015, had accused Bank of America of pulling credit information without “permissible purpose” as required by the FCRA. He didn’t give his consent to access his credit information following a bankruptcy, Pastor claimed, and because debts to Bank of America had been discharged in bankruptcy, the bank didn’t have a reason to pull his credit report information.
The parties reached a settlement in principle last summer, according to court documents. Judge Chhabria in October allowed extra time for the parties to file their motion for preliminary approval, and in December the parties told the court they needed extra time after some holdups with the confirmation discovery process that relied on a third party.
This April, the parties filed their settlement agreement and Pastor filed an amended class with three new plaintiffs and class representatives.
The settlement agreement says class counsel will move for a fees award of up to 30 percent and the plaintiffs will apply for a service award of up to $5,000 each.
A final approval hearing is scheduled for January.
A representative for the class declined to comment. Attorneys for Bank of America didn’t immediately respond to requests for comment on Monday.
The plaintiffs are represented by Joshua B. Swigart and David J. McGlothlin of Hyde & Swigart and Abbas Kazerounian and Ryan L. McBride of Kazerouni Law Group.
Bank of America is represented by Joseph Duffy and Christine Marie Vitale of Morgan Lewis & Bockius LLP.
The case is Pastor et al. v. Bank of America NA, case number 3:15-cv-02831, in the U.S. District Court for the Northern District of California.
–Editing by Breda Lund.