Is it LEGAL for a creditor to close your account based off something that doesn't exist?

[Anonymous]

When a creditor closes an account stating  you have some kind of legal action pending against you and you get a copy of your credit report and go to your circuit clerk and the accusation is unfounded, you have always paid on time and there is no legal action, what actions can be taken against the credit card company for stating false information and ruining your credit score? Is there any law that protects consumers from this? I have contacted their EO numerous amount of times to see where this information they are relying on was obtained because there is nothing in court records or my credit report and they each time give me the run around.

[Anonymous]

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@Anonymous wrote:

When a creditor closes an account stating  you have some kind of legal action pending against you and you get a copy of your credit report and go to your circuit clerk and the accusation is unfounded, you have always paid on time and there is no legal action, what actions can be taken against the credit card company for stating false information and ruining your credit score? Is there any law that protects consumers from this? I have contacted their EO numerous amount of times to see where this information they are relying on was obtained because there is nothing in court records or my credit report and they each time give me the run around.

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A credit card company closing an account does not ruin your score. If your score dropped, something else caused it.

[Anonymous]

Do you know if it is legal for them to accuse me of a legal action for closing my account and one not exist?

[RobertEG]

I would consult an attorney.

You are seeking legal advice.

[Anonymous]

I'm waiting to hear back, but wanted to know if maybe anyone else experienced something similar or whether there was someting in the FCRA or ECO about adverse action

[RobertEG]

Yes, the cancellation of an existing credit account or the denail of new credit are both  considered an adverse action under the definition provided at FCRA 603(q).

That enttiles the consumer to a free copy of their credit report if the creditor informs them that they used a credit report as a part of their determination of cancellation or denial of credit.

However, the FCRA does not regulate the specific conditions under which a creditor may close an account.

That would be a civil matter for resolution of the assertion that they made false statements in their determination.

In closing the account, they are not required to provide reasons to the CRA.  Thus, I do not see an issue of knowingly false statements in violaltion of FCRA 623(a)(1).

I dont see the FCRA as a basis for false reporting.

[Anonymous]

okay, thank you. I wasn't sure if the FCRA covered cancelation or not, so thank you for clarrifying that for me. It is being reported by them however, that the account is closed at my request  and despite my best efforts they won't say where this information oringinated from their relying on but it's not in my credit report being that I have 0 public records.

[elim]

I'm pretty sure they can close any of our accounts, at any time, for any reason whatsoever.   I think i would work on re-opening the account if the reason was in error instead of going the legal route.

Did the CCC put a note on your report or something? Or does it just say "closed by grantor"?

[Anonymous]

It says closed by consumer. I don't recall there being a note but I will double check. I've informed them that I have 0 public records and that a search with the courts displayed no results. Their reasoning stated past, present or pending legal action. However, there were and are no legal actions. They told me that I could reapply but I don't feel that I should have to since they closed the account without merit or at least should've said for another reason rather legal action which there is no record of. 

[Callandra]

I'm a bit confused -- so Cap1 closed your account (even though it's being reported as closed by consumer) and they're saying it's because of pending legal action? The way the first post was worded made me think they actually put that as a note on your reports. But that's not the case? 

I don't think there's any legal action to be taken here; a lender can close your account or increase/decrease your limit at any time, that's in the T&Cs of every credit card. So I'm guessing you called and asked why it was closed and they said it's due to pending legal action? You could try faxing copies of your reports to the EO and try to get it re-opened or otherwise, you might just want to move on.