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Thursday, July 24, 2025

Credit One Bank Confronts Class Action Over Allegedly Deceptive Practices and Damaging Credit Reports

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Credit One Bank, a prominent credit card issuer for individuals with limited or recovering credit histories, is at the center of a growing legal storm.

A federal class-action lawsuit—now moving toward potential settlement—accuses the Las Vegas-based financial institution of widespread deceptive practices that allegedly burdened thousands of consumers with unfair charges and distorted their credit profiles.

Filed on behalf of current and former account holders, the lawsuit claims that Credit One imposed inflated and opaque fees, mishandled billing practices, and furnished inaccurate credit data to major credit bureaus—mistakes that plaintiffs say damaged their ability to secure loans, apartments, or even employment.

“This isn’t just about a few extra dollars on a statement,” said Rachel Monroe, an attorney with Consumer Justice Legal Group who is monitoring the case.

“It’s about systemic financial harm that often goes unchecked because it targets people already on the margins.”

According to court documents  the lawsuit consolidates more than 1,400 formal complaints submitted to the Consumer Financial Protection Bureau (CFPB), state regulators, and industry ombudsmen between 2021 and 2024.

Many of the grievances describe billing practices that were difficult to interpret and nearly impossible to dispute due to automated systems and limited customer support access.

Some consumers report being charged multiple times for the same service or being issued late fees even when payments were made on time.

Others say their credit reports showed delinquent activity despite having closed or paid-off accounts—damaging their FICO scores without their knowledge.

Though Credit One denies any wrongdoing, it has agreed in principle to a multi-million-dollar settlement that would compensate affected customers.

Those who can provide documentation of harm—such as billing records or evidence of credit misreporting—may be eligible to receive payouts estimated between $1,000 and $2,210, depending on individual circumstances.

The exact size of the fund remains under seal pending court approval. Attorneys for the plaintiffs say the settlement also includes provisions for administrative reform within the bank’s customer service and reporting protocols.

Who Qualifies—and What Comes Next

If approved, the settlement would apply to individuals who:

  • Maintained a Credit One account during the qualifying period (likely 2020–2024);

  • Incurred questionable charges, fees, or adverse credit reporting;

  • Can submit documentation supporting their claim.

A court ruling is expected later this month. Should it be approved, notices will be distributed via mail and email. A public website will then open for claim submissions, with payments expected to begin by mid to late summer 2025.

The Credit One case comes amid increased scrutiny of so-called “junk fees” by federal regulators and renewed interest in tightening rules around credit reporting.

In recent months, the Federal Trade Commission and the CFPB have both hinted at more aggressive oversight of firms that disproportionately serve low-credit consumers.

“Cases like this are the canary in the coal mine,” said Dr. Jerome Alston, a financial ethics researcher at Howard University. “They reveal how much oversight is still needed in parts of the financial industry that don’t operate in the sunlight.”

What Affected Consumers Should Do Now

  • Collect Documentation: Save billing records, bank statements, and any correspondence with Credit One.

  • Check Credit Reports: Look for inaccuracies and request corrections from bureaus if needed.

  • Watch for Official Notices: Stay alert for claim instructions via email or post.

  • Act Quickly: Once the claims portal opens, deadlines will likely be strict—often 60–90 days.

As regulators continue to probe high-fee lending models, the Credit One case may prove to be a pivotal moment in redefining accountability in subprime finance.

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