Credit Bureau Connection Inc., would pay more than $2.7 million to settle a class action alleging it provided false information on credit reports to automobile dealerships, under a deal given preliminary approval by a federal court.
Credit Bureau allegedly indicated that some potential buyers were on a watch list created by the Department of Treasury to enforce trade sanctions. The settlement would provide payments of $1,000 to each of the 1,071 class members without the need for a claim form or any other response.
Plaintiff Sung Gon Kang alleged in the lawsuit, filed in the US District Court for the Eastern District of California, that he was denied credit while attempting to buy a car based on information in a Credit Bureau consumer report matching him with a North Korean citizen with a similar name.
Treasury Department regulations prohibit car dealers from doing business with anyone designated as a “Specially Designated National” on a list maintained by the department’s Office of Foreign Assets Control, the lawsuit said.
Kang claimed that CBC failed to follow reasonable procedures to guarantee the accuracy of the information it provided to car dealers, in violation of the Fair Credit Reporting Act and the California Consumer Credit Reporting Agencies Act.
Magistrate Judge Sheila K. Oberto granted Kang’s motion Thursday for preliminary approval of the deal.
Attorneys would separately receive up to $1.62 million in fees and costs, and Kang would receive up to $15,000 as a service award.
Credit Bureau also would cover the estimated $44,000 cost of administering the settlement.
A hearing to consider final approval of the deal has been set for Oct. 25.
Francis Mailman Soumilas PC and Caddell & Chapman represent Kang and the class. Cadwalader, Wickersham & Taft LLP and Skaggs Faucette LLP represent Credit Bureau.
The case is Kang v. Credit Bureau Connection Inc., E.D. Cal., No. 1:18-cv-01359, 6/1/23.