Antitrust Lawsuit Filed On Behalf of FICO B2B Credit Score Purchasers

Apr 6, 2020 | Antitrust

Class Action Alleges Fair Isaac Corporation’s Anticompetitive Conduct Discouraged Adoption of Credit Score Alternative for Business Purchasers of FICO Credit Scores

Kehoe Law Firm, P.C. is making business owners aware that on April 2, 2020, a class action lawsuit was filed in United States District Court, Northern District of Illinois, against Fair Isaac Corporation on behalf of “B2B Purchasers” of a FICO B2B Credit Score from Fair Isaac and/or a Credit Bureau. 

The lawsuit “concerns the B2B Credit Score Market, over which Defendant Fair Isaac has unlawfully maintained a 90% monopoly for many years.”  According to the complaint, “Fair Isaac has abused its monopoly power by engaging in anticompetitive and exclusionary conduct and agreements. Fair Isaac has suppressed competition, stymied innovation, and limited access to credit for millions of Americans – all in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§1 & 2, as well as numerous state antitrust and unfair trade practices laws.” [Emphasis added.]

Alleged Pattern of Anticompetitive Conduct To Discourage Adoption of VantageScore Credit Score Alternative 

The antitrust class action complaint alleges that

[r]ather than compete on the merits with VantageScore, Fair Isaac has engaged in a pattern of anticompetitive conduct over the course of more than a decade to discourage the adoption of VantageScore and preserve its own monopoly, with the Credit Bureaus’ [i.e., TransUnion, Experian, and Equifax] assistance. Fair Isaac has abused its monopoly power to prevent the Credit Bureaus from successfully marketing and selling a competitive alternative to FICO Scores and has waged a disparaging public relations and advertising campaign to create fear, uncertainty, and doubt about VantageScore’s viability and reliability with lenders and consumers.

Through its exclusionary conduct, Fair Isaac has succeeded in preventing the substantial sales growth that VantageScore or a competing credit scoring system would have achieved though competition on the merits. Having suppressed competition, Fair Isaac has been able to significantly increase prices, including most recently in September 2019, for its FICO Scores. But for Fair Isaac’s suppression of competition and the resulting contractual agreements not to compete, VantageScore or another competitive credit scoring system would have thrived and won substantial market share through its innovative product and would have reduced the prices paid for B2B Credit Scores by Plaintiff and members of the Class.

Fair Isaac’s anticompetitive and exclusionary conduct has harmed businesses that have been deprived of competitive pricing for instruments to allow them to gauge credit risk and have had their freedom of choice restricted. Opening the market to competition is essential to competitive pricing and product innovation, including scoring the tens of millions of creditworthy Americans who have been denied access to credit. [Emphasis added]

If you are a lender, financial institution or other business (i.e., a “B2B Purchaser,”) that purchased a FICO B2B Credit Score from Fair Isaac or a Credit Bureau, you are encouraged to contact Kehoe Law Firm, P.C. to discuss potential legal claims.
Kehoe Law Firm, P.C.

Paycheck Protection Program Loan Applications Lawsuit Against BOA

Apr 6, 2020 | Consumer Protection, Employment & Technology Archive

Class Action Lawsuit Filed Over Bank of America’s Alleged Refusal to Accept Paycheck Protection Program Loan Applications, Unless Small Businesses Are Active Bank of America Borrowers 

Kehoe Law Firm, P.C. is making small business owners aware that on April 3, 2020, a class action lawsuit was filed against Bank of America, N.A. (“BOA” or “Bank of America”) in United States District Court, District of Maryland, for violations of the CARES Act, violations of the Small Business Administration’s (“SBA”) 7(A) loan program, a declaratory judgment, and a preliminary and permanent injunction.  

According to the complaint:

The Paycheck Protection Program (“PPP”), which is part of the $2 trillion stimulus package created by the CARES Act in response to the COVID-19 pandemic that was signed in to law on March 27, 2020, empowers lenders to make available as much as $349 billion in government-guaranteed loans to cover eight weeks of payroll and other expenses.

BOA – creating an improper and unlawful restriction on PPP loans – is refusing to accept PPP loan applications unless the small business is an active borrower with BOA. BOA is thus unlawfully prioritizing existing customers who are active borrowers as of February 2020.

Indeed, BOA has denied access to the PPP program to small businesses that do not have a “lending” relationship with BOA. [The Plaintiff], which has a depository relationship with BOA, was prohibited by BOA from even applying for a PPP loan with BOA, despite meeting the statutory requirements for a PPP loan. [Emphasis added.]

There is, according to the class action complaint, “[n]othing in the PPP federal law allows for the differentiation of a small business loan under the federal program between a bank’s depository clients and their lending clients. And, nothing in PPP federal law allows for BOA to determine who can participate in the federal program based on that improper criteria.”

Small business owners who qualify for a loan under the Paycheck Protection Program and who were prevented from applying for a PPP loan by BOA, because they do not have a pre-existing debt relationship with Bank of America are encouraged to contact Kehoe Law Firm, P.C. to discuss potential legal claims. 
Kehoe Law Firm, P.C.