The United States District Court for the Northern District of California entered an order on August 9, approving a $2.4 million settlement between Social Finance Inc. (“SoFi”) and a class of nearly 11,000 consumers for alleged violations of the Fair Credit Reporting Act.
In Heaton v. Social Finance Inc., the named plaintiffs alleged that SoFi, a student loan refinancing company, violated the FCRA by representing that they would only make “soft” credit pulls, which do not affect a consumer’s credit score, when SoFi obtained credit reports from Experian, but instead performed both “soft” and “hard” credit inquiries before the borrower had applied for a loan product. Plaintiffs alleged that SoFi did not have a permissible purpose to make the “hard” credit inquiries and that SoFi obtained consumers’ credit reports under false pretenses.
The plaintiffs filed a class action complaint in November 2014 and sought to certify a class of all persons on whom SoFi ran a “hard” credit inquiry between November 20, 2013 and August 13, 2014 in connection with a student loan refinancing or a personal loan who neither funded a loan nor uploaded all requested documents.
The parties reached a settlement in April 2016. The $2.4 million settlement provides for approximately $673,000 in attorneys’ fees and expenses for class counsel, and incentive awards to the two named plaintiffs in the amounts of $7,000 and $3,000. After these deductions, each class member will receive a payment of approximately $164.