Legal attack on Hard pulls

Im trying to develop a legal attack strategy against one of the abuses collection types have been perpetrating against consumers: The HARD pull.

In general on "PULLS" and HARD inquiries (the kind that fk up our FICO scores...I posted this on CiC, and bring the thought process here:

Collectors can pull, they have PP but NOT for a hard pull... aka one that prospective Creditors/Employers can see.

In order for the inquiry to be coded as HARD it must be done under...

1681b(a)(2) or 1681b(a)(3)(A) and there is no provision for collections pulls there, as YOU are not involved in a CREDIT TRANSACTION with the CA or JDB, or even a OC or OC atty after chargeoff.

So if it ends up HARD then they lied on the codes given to produce the pull. 1681b(a)(2) or 1681b(a)(3)(A) is only for YOU going down to apply for a loan or authorizing some other party to have access with your expressed permission.

They do it anyway, they violate, because they are in the collections business and are doing anything possible to intimidate and coerce payment from you, including deliberately poinsoning your credit report and lowering your FICO score.

They can do all the SOFT pulls under 1681b(a)(3)(F)(ii) thier little butts desire, but not a HARD pull, even though it is industry Standard Operating Proceedure.

It wont end until people start suing thier asses off with the following:

1681b(a)(3)(A) (Coding a collection inquiry as a hard inquiry)
1681h(e) (Defamation and Invasion of Privacy)
1681n (willful misrepresentation or concealment of true nature of inquiry)

and remember:

Obtaining consumer credit reports under false pretenses is a violation of (your state here) criminal law, (section number), and of Federal criminal Law under Title 18 of United States Code and a violation of the Fair Credit Reporting Act 15 U.S.C. 1681q.

They are coming in as collections under 1681b(a)(3)(F)(ii) as thier alleged PP, but this would only lead to a SOFT PULL. So how can it end up HARD? Well cause they lied and coded it as something else.

Remember also they must have "certificates" on file with the CRA, and if they LIE on that in order to get PP then they are guilty of WILLFUL violation of obtaining credit reports under false pretenses. Collection atty's are double required, they must have a general certificate on file AND a specific certificate for the SPECIFIC ACCESS of your file. These certificates and the computer coding used to obtain the pull are what you want to subpeona from the CRA to find out just what the CA/JDB/Atty filed as PP and how it was coded to end up a HARD pull. Anything false or misleading in those and WAMMO serious FCRA and possible criminal violations.

** QUOTE from DIVEMEDIC on CiC

I am going to disagree with you there. The FCRA makes no mention of soft versus hard pulls; it merely states what is a permissable purpose and what is not. When that law was written no thought was given to what pulls would do to FICO scores, as FICO scoring was not in use at the time.

Collection is a permissable purpose, and I have not seen any evidence of the courts or the statute censuring a CA for pulling credit.

**

The CRA's have made the distinction, and thier manuals inform prospective data users what those distinctions are. So the company/atty who signs up with a CRA and files a general certificate is educated by the CRA's documentation as to what PP's require what, and what codes (as all accesses are done by computer) result in what action.

So yes the FCRA doesn't say exactly, but now thanks to the CRA's infrastructure all parties (users) know what does what.

The CRA would take a 1681b(a)(3)(F)(ii) inquiry, which is what a COLLECTOR/JDB/Atty would use to procure a credit report LAWFULLY under the PP they are entitled to, and record that as a SOFT inquiry.

Did you ever wonder why SOME collection inquiries are SOFT for some people, and HARD for others? The "unknown quantity" is what actual CODED PP was sent to the CRA for the transaction. If a collector instead of sending a lawful 1681b(a)(3)(F)(ii) [which causes a SOFT pull] were instead to send an UNLAWFUL 1681b(a)(3)(A) or even WORSE a very unlawful 1681b(a)(2) (ie: YOU gave them written permission) then you end up with a HARD pull.

The documentation of the unlawful access and unlawful PP is memorialized in the transmission record of data sent back and forth between the "collector" and the CRA in reference to your account. And the CRA is not going to "shred" that record, so if you were to subpeona it, you could actully nail them with proof in thier "own words" of thier illegal access.

Now they'll then claim bona-fide error, and then you attack that as obsurd since if yoou had practices in place to prevent such a thing, the thing would not have happened, etc.

So although the FCRA does not spell out WHAT actions do what, they do spell out what are PP's by whom, and make it quite unlawful, with penalties, to use the incorrect PP for your access. The CRA is only the filter, input A generates output B, and since we (through discovery) can introduce to the court the specifics, its up to the "violated" consumer to prosecute the matter.

Also note, the FCRA gives direct right of private action against parties unlawfully obtaining or using thier credit report. You dont even have to go through the "dispute" process with the CRA to trigger your private right of action.

I know this seems cutting edge, and it is, because noone has yet fought the battle to make this argument. But I seriously believe it is a valid argument, has legal merit, and should be persued when ever any of us have occasion to use it as part of our arsenal in dealings with collectors and thier misdeeds.

I'd like to get a discussion going on this, and get opinions, especially from those who have more intimate knowledge of CRA inquiry methods.

 

hmmm

The critical aspect is this has to be interpreted, as Butch has shown us a few times, under the rules for statutory interpretation.

SO the key element in 1681b(a)(3)(A) is "a credit transaction". A collection agency or JDB or collection attorney are NOT involved in a credit transaction with the consumer. As much as they might want to CLAIM they are in a "credit transaction" with the consumer, they are not. No claim of assignment etc can confer the OC's PP to the collector, the collector for credit report procurement is a seperate entity that has to have its own justification for access as a CR user. Proof of this tenent is the fact every collector, collection agency, JDB, collections atty all have to file thier OWN certifications with the CRA's when they open a user account. If they were "covered" by the OC's then they wouldn't need that, moreover, IF they were covered by the OC's PP, they could just do an AR/AM access, which.... is a SOFT pull ;-)

See the closure on the logic trail in the argument?

Only the OC is/was involved in a credit transaction. And the OC is a special case, as they can access using AR/AM as the PP, neither of which generate HARD PULLS. Though the OC could, to be a dick, use 1681b(a)(3)(A). They dont in general for public relations reasons.

Misc. other BUSNIESS reasons to access the report, which are valid PP, all fall under 1681b(a)(3)(F)(ii).

Further, a few courts have found if a user has a PP and uses the wrong or false-pretense PP, it is moot as they had authority under "some" argument. That however falls on its face the moment the DAMAGE issue of the hard pull is brought into the equation. If the intent, especially WILLFUL intent of the "false-pretense" was to o DAMAGE to the consumer then they have no "out" by having "any other PP".

The collector, although he may have PP, does NOT have the PP that generates a hard pull. Further, he is using the "false pretenses" PP to deliberately DAMAGE the consumer's credit report with a hard pull.

If the collector had pulled under the lawful PP, it would not generate a hard pull. The only way they can cause a hard pull is under 1681b(a)(2) or 1681b(a)(3)(A).

Example for 1681b(a)(2) is when you go apply for credit.

Example for 1681b(a)(3)(A) is when you ask the OC to increase your credit line.

Mind you, the FCRA does not define hard/soft. The CRA's as a standard industry practice have made the distinction, and catagorized the different PP's under 1681b, chosen what equals hard/soft, and setup the certification requirements for the PP's.

So if a collector generates a hard inquiry, chances are very high he has falsified the PP for the pull and/or his certificate filed as required to be allowed access at all.

Given the seriousness of irregularities in these matters, this approach can be used to give serious pause to the collector. If he has obtained using false pretenses, the punishment can be very serious indeed.

 

hmmm

bump for continued thought.