VISA has filed suit in the US District Court for the Eastern District of New York against a number of its customers, alleging that the company’s service has been plagued by fraud.
The complaint was filed Wednesday in federal court in Manhattan, and alleges that the banks have violated the Fair Credit Reporting Act and the Bank Secrecy Act by engaging in fraudulent practices.
The suit was first reported by Business Insider, which also cited a spokesperson for the bank as saying that it is currently reviewing the suit.
Visa’s complaint alleges that its customers have been “fraudulently” targeted by banks that “have engaged in a pattern or practice of using third-party fraud detection and prevention services to falsely claim that VISA and its customers are victims of unauthorized transactions,” and that the fraud has been perpetrated through the use of fraudulent credit reports.
The company says that it “continues to cooperate with law enforcement in the investigation of fraud against VISA customers.”
The company claims that it has “continued to actively monitor and combat the unauthorized activity of banks that target its customers and that is subject to compliance with the Fair Debt Collection Practices Act, which prohibits banks from collecting on consumer debts and to engaging in other predatory practices that prey on consumers.”
VISA’s complaint also alleges that banks “continue to use credit reports to falsely identify and identify the creditworthiness of VISA users in order to attempt to collect from VISA accounts.”
In a statement, VISA said that it does not know who the alleged perpetrators are or how many accounts they are targeting, and that it will be providing additional information to the US Attorney’s Office “as we work to identify the alleged criminals responsible for this attack.”
Visa also said that “VISA is actively cooperating with the Department of Justice’s investigation.”
Visa also accused its competitors of having similar conduct.
According to the lawsuit, Citigroup, which is also the largest credit reporting agency, has “a large number of consumers whose credit reports have been targeted by credit reporting companies.”
The suit alleges that Citigroup “has engaged in and continues to engage in fraudulent activities to collect and disburse fraudulent fees, charges, and other fees and charges.”VISA says that Citibank and Chase are also defendants in the suit, and it will “provide additional information as it becomes available.”
“The fraudsters’ malicious intent is to steal money from victims and then use it to engage their credit card providers to take money from them,” VISA CEO John Schmit said in a statement.
“Our customers have the right to protect themselves and their identity and credit.”
The lawsuit claims that Visa customers are “subject to the unauthorized collection and use of their bank accounts, including VISA credit cards, by fraudulent credit reporting agencies that target VISA, Chase, and Citibanks customers,” which “is prohibited by the Fair and Credit Reporting Acts.”