Judge Sanctions Defendant, Certifies Class of 300k Who Did Not Have Credit Reports Updated After BK Discharge

A Bankruptcy Court judge in New York has certified a class of nearly 300,000 consumers for whom a furnisher failed to update their credit reports to discharged via bankruptcy from charged off while also sanctioning the furnisher for “repeated, lengthy, and willful discovery failures” including the submission of false affidavits and repeated misrepresentations to the Court.

A copy of the ruling in the case of Anderson v. Credit One Bank can be accessed by clicking here.

The defendant was accused of violating the discharge injunctions of individuals who had filed for bankruptcy protection via a “systematic policy of refusing to correct its tradelines to pressure” the plaintiff and other members of the class “to pay their discharged debts,” wrote Judge Robert Drain of the Bankrutpcy Court for the Southern District of New York. The members of the class will include anyone — dating back to May 2007 — who had an unsecured debt owed to the defendant and whose credit report was not updated to be either discharged or included in bankruptcy.

The defendant attempted to argue that many of the debts had been sold to third parties and that it was not its job to update the tradelines, but Judge Drain did not have much patience for the defendant’s argument.

Judge Drain goes into great detail in his 83-page ruling parsing the issues that led him to impose sanctions on the defendant, including transcripts from hearings involving representatives from the defendant, going as far as to call one hearing back in 2016 as the “most extraordinary” he has ever held during his 20-year career on the bench.

“Credit One’s failure to provide a legitimate reason, notwithstanding repeated opportunities to do so, for its policy not to correct its tradelines to reflect the bankruptcy discharge, coupled with its extraordinary efforts to thwart discovery designed to test its asserted defenses, as well as the dribs and drabs that, despite those efforts, emerged during discovery to show the falsity of those defenses, makes it hard to see how Credit One would ever defeat Plaintiff’s claim that its policy violated the discharge,” Judge Drain wrote.

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