- The Washington Times - Thursday, February 15, 2001

Bank of America, the nation's largest bank, is being accused of obtaining unauthorized consumer-credit reports without a legitimate reason and allowing the reports to be sold to outside parties.
In a lawsuit filed at U.S. District Court of Maryland in Baltimore this week, 27 persons are claiming the Charlotte, N.C.-based bank violated the Fair Credit Reporting Act, a federal law that protects the information in consumer-credit reports from being used illegally.
"Any bank which allows its credit reports to be distributed in this fashion is going to have to explain itself in court," said Rodney R. Sweetland, the Arlington attorney representing the plaintiffs. "People expect their personal financial information will be safeguarded by those to whom it is entrusted."
The suit is seeking $81 million in damages, or about $3 million for each plaintiff.
Bank of America officials had not seen the lawsuit, but said in a statement, ". . based on what we've heard, we believe [the lawsuit] to be totally without merit and nothing more than an attempt to get money from us."
The lawsuit was filed just months before financial institutions must be fully compliant with the Gramm-Leach-Bliley Act. The financial-modernization bill, which Congress passed in November 1999, protects consumers' privacy from unlimited sharing of their personal information, among other things.
Credit reports reveal personal information about individuals, ranging from where they work and live to how they pay their bills and if they have ever been sued, been arrested or filed for bankruptcy. The reports are used when determining someone's eligibility for items such as home mortgages, loans, credit, insurance and employment.
The reports can be obtained if there is a legitimate business need for the information and without the consumer's permission in many cases, according to the Fair Credit Reporting Act, which was established in 1970 and is enforced by the Federal Trade Commission.
"We really don't know how often it's violated," said Peggy Twohig, assistant director for financial practices at the FTC. "The law does have legal protections in place to try to make sure that doesn't happen."
In a 1997 amendment to the Fair Credit Reporting Act, people who obtain credit reports without legitimate business reasons can be sued by the individual and by the credit bureau that gave out the information.
"At Bank of America, we obtain credit reports only for legitimate business purposes as part of the relationship with the customer," Bank of America said in its statement. "And furthermore, we have policies and procedures in place to ensure that reports and records are used only for authorized purposes."
Mr. Sweetland said the plaintiffs in this case many from the Washington area had no idea why their credit reports were obtained and never gave permission to have their records examined.
"I strongly suspect no one was aware" of Bank of America's actions, Mr. Sweetland said. "No one would allow this without challenging it."
About 25 percent of the plaintiffs are Bank of America customers.
Mr. Sweetland said the bank obtained roughly 3,000 to 5,000 unauthorized consumer-credit reports or investigative consumer reports, which include interviews with neighbors or acquaintances about a person's lifestyle and reputation.
"This is not a class-action suit, but it could be," said Mr. Sweetland, who contacted 100 to 200 people whose credit reports were obtained by the bank. The 27 named plaintiffs agreed to be part of the lawsuit.
Between June 1999 and July 2000 unidentified bank officials obtained the plaintiffs' credit reports, which were sold off to an unnamed third party, the lawsuit says.
In December, Mr. Sweetland sent a letter to Bank of America requesting information about why the company was looking into the credit reports but it was never answered, according to the suit.
"They never responded, which indicates further evidence of their wrongdoing," Mr. Sweetland said.
The lawyer said he works extensively in consumer-credit litigation, representing both plaintiffs and companies who use the information. He said he learned about the issue when a business client told him that companies routinely sell credit information illegally.
He declined to say how he learned about the bank's activities.

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