Do I have standing to sue a credit bureau or lender after being approved for a loan but being prevented from signing due to their error?

Question

I'm in New York.

So, what happened was that I applied for a loan from a loan agency. My credit was good, I was making good income, and my loan was approved. I need to stress that last point. My loan was approved, not just superficially, or that things "seemed good", I was approved. I have emails saying that, specifically:

Congratulations Sean,

Your loan request has been approved!

Log in now to review the terms of your offer and sign your loan agreement.

So, I was approved, and just needed to sign electronically. Great! Except, in order to sign, I had to verify my identity through a credit bureau questionnaire.

I kept failing this questionnaire, because it was giving multiple choice questions where no answer was possibly correct. For example, it asked how much how much I owed in student loans listing 4 non-zero amounts to choose from, and I've never had a student loan so there was no correct answer.

This wasn't a case of identity theft or anything like that. There are no student loans on my report with any bureau. Another similar question asked me to name a street I used to live on, but again none of the choices were correct. About half the questions were using my information, and I was able to answer them correctly, but it was not enough.

I made numerous calls to the credit bureau and the loan agency to try and resolve this, but no one was able to help me. The loan agency was unable to consider any alternative method for me to sign for my loan, and the credit bureau was even more unhelpful, having no idea why it was happening and no solutions to offer.

If I had been able to sign for the loan I was approved for, I would not have suffered damages that I did after soon after losing my job and apartment.

Do I have standing to sue the loan agency for failing to provide an alternate method of identity verification after approving me for a loan? Or for the credit bureau for having a malfunctioning identity verification system that preventing me from being able to sign for a loan I was approved for? Or both?

Answer 1

Do I have standing to sue a credit bureau or lender after being approved for a loan but being prevented from signing due to their error?

Unfortunately, no. The email you got from the loan agency reflects that no contract was formed yet. The email merely is the loan agency's expression of interest to proceed toward the formation of that contract.

Absent that formation of the contract, even if for reasons beyond your control, you are not entitled to the benefits or consideration(s) the contract would provide. Nor would the lender be entitled to your compliance with the terms of that contract, terms which might not even be informed --let alone known-- to you. There is no legal obligation from one party to the other.

Lastly, the agency's or bureau's faulty process/questionnaire is not actionable either. Lender's reluctance to employ an alternative method is within his freedom of contract.