I need a quick answer... I had a CA pull a CR on me last year, I see no valid reason for this CA doing this. Does anyone have case law or other info for me to be able to prove that this CA acted illegally? I am in litigation with this CA and I would like to amend my complaint to add this if I can prove this was a non-permissable inquiry. Thanks Susitna
You may not like this They have a permissable purpose if you have an outstanding debt. Once the debt is paid, they no longer have a right to pull a report.
Re: You may not like this Where does it say that in the FDCPA? According to FTC staff opinion letters, Attorneys and collectors do not have a permissable purpose because they are not extending or offering credit, and they are not engaging in a transaction involving a person's creditworthiness.
Re: You may not like this Actually, if they do not have an account for you, they legally can not pull your file. The following letter is a bit more information than you need, but I'm sure someone else can benefit from it as well. UNITED STATES OF AMERICA FEDERAL TRADE COMMISSION WASHINGTON, D.C. 20580 Division of Financial Practices ~ Clarke W. Brinckerhoff Attorney ~ 202-326-3224 April 30, 1999 Mr. Kenneth J. Benner American Council on Consumer Awareness Post Office Box 17291 St. Paul, Minnesota 55117 Re: Sections 604(a)(3), 607(e), and 609(a)(3) of the Fair Credit Reporting Act Dear Mr. Benner: This responds to your letters concerning whether the Fair Credit Reporting Act ("FCRA") permits a party to obtain a credit report on a consumer under certain circumstances. We list the three questions you posed verbatim, with our opinion following each. 1. How long after a consumer terminates an account does a previous credit card issuer or lender have access to the consumer's credit file? Section 604(a)(3)(A) of the FCRA provides a consumer reporting agency ("CRA," usually a credit bureau) with a permissible purpose to provide a report on a consumer to a person who "intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer."(1) Once an account is closed because the consumer has paid the debt in full (and also, in the case of an open-end account such as a credit card account, notified the creditor to close the account), it is our view that no permissible purpose exists for a CRA to provide file information on a consumer to the creditor. Because there no longer exists any account to "review" and the consumer is not applying for credit, the FCRA provides no permissible purpose for the creditor to receive a consumer report from a CRA. I enclose a recent staff opinion letter (Gowen, 04/29/99) that discusses this issue in more detail. 2. Is a permissible purpose for obtaining consumer credit reports for the sole purpose of determining possible debt by a collection agency for the purpose of soliciting collection business from creditors? No. You report that a debt collector and a major credit bureau assert that the collector has a "legitimate business need" to obtain a random selection of credit histories for the purpose of determining overdue accounts and then contacting the creditors on the account to solicit collection business. Section 604(a)(3)(F)(ii) does provide a permissible purpose to a party that "has a legitimate business need for the information to review an account to determine whether the consumer continues to meet the terms of the account." In our view, this section authorizes a provider of an existing account (e.g., a bank that has established a checking account with the consumer) to obtain a report on the individual. In the scenario you described, the debt collector has no "account" to "review" when it orders a credit report (in fact, no "account" may exist for some consumers), but instead seeks to randomly examine credit files in order to solicit collection business from creditors. The collector is not authorized to obtain (nor a CRA to furnish) a consumer report for that purpose. The entire focus of Section 604 is to protect the confidentiality of consumers' personal data in the files of CRAs, by restricting access to parties who have a specific need for it.(2) If a third party such as a debt collector can review the consumer's file to see if there exists any account that the creditor has reported as delinquent, the section has totally failed its goal. 3. Is it permissible for a business doing credit with a consumer to obtain credit information under false pretenses, i.e. hiring another firm to solicit credit file information without disclosing the name of the party actually seeking the credit file information? In these cases the consumer attempting to determine who has accessed his credit file, as required, is provided with names of parties unknown to him. No. Section 607(e)(1)(A) provides that the second firm may "procure a consumer report for purposes of reselling the report (or any information in the report)" only if it discloses "the identity of the end-user of the report (or information)" to the credit bureau. In our view, the firm hired to procure credit file information would be required to comply with this provision. Section 609(a)(3) requires the credit bureau, when responding to a consumer attempting to determine who has accessed his file, to identify the end-user -- not the intermediary -- as the recipient of the report. Thus, the amended FCRA results in the consumer being provided with the parties who actually used his or her credit file information. The opinions set forth in this informal staff letter are not binding on the Commission. Sincerely yours, Clarke W. Brinckerhoff -------------------------------------------------------------------------------- 1. Section 604(a)(3)(F)(ii) provides a similar "review" purpose in connection with accounts (such as checking accounts) that do not involve credit. 2. "The bill also seeks to prevent an undue invasion of the individual's right of privacy in the collection and dissemination of credit information. ... (Section 604) requires that the information in a person's file be kept confidential and used only for legitimate business transactions." S. Rept. 91-517, 91st Cong., 1st Sess. 1 (1969).
Hey Susitna, If this CA is the one I am thinking of, let me know how it turns out. I'm getting ready to file on AFS after labor day.
I was also under the impression that if you are in the validation process they cannot pull an inquiry. I think it's considered "collection activity".
Re: My apologies It's not clear if a CA has a purpose to run a credit report....am I missing something?
Re: My apologies § 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b] (A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer;
Re: My apologies Smog, They rely upon the same law I just quoted. It's good but only IF (key word is IF) they can and do validate the debts authenticity. If not then, retrospectively speaking, they violated because there is no legitimate account afterall. Once they do that the only way they can save themselves from the violation is to come forth with the proof you've already legally demanded. see? I recently had a similar situation. I had 3 accts. show up on my CR's from a hospital. This is why I joined this site BTW. ALL 3 accts. were paid timely by my ins co., it's just that the nitwits at the hospital FAILED to properly apply it to my account. In the interim. One of the CA's placed 3 collection inquiries on my CR along with the collection acct.. Well... long story short, once I showed them their mistake (with a rather brutal series of letters) they removed the collection acct., BUT NOT THE INQ'S. When I called them (CBCS of Columbus) they said they did what they were supposed to do and they couldn't do anything about the inq's. (Collection inquiries are hard) Another long story short, ... the inq's are now GONE too, because there was no legitimate collection acct. in the first place. hth
Re: My apologies The provision you are quoting seems to be only for the original creditor. The CA has no authority to obtain the CR because it is not extending credit. Also, in my particular case, the CA has a current address and contact info for me. I know I am being a pain in the ass, but I can't see how any CA has any reason to pull a report, unless they are attempting to locate a debtor. Anyways, I have this CA bent over at this point on other violations, mainly state unfair practices. I really just want to add as much meyhem to this suit as possible. Thanks for the input, once again this board has responded and helped make it a little easier for someone to go up against a CA.
Re: My apologies How do you figure? The provision clearly states or for the review or collection of an account. If you already have them on other violations I would stick to what's solid and avoid muddying the waters with the other stuff.
Re: My apologies Butch, Thanks for the response. In my case, the OC (Dr), who had seen me numerous times before and ALWAYS billed my insurance and ALWAYS got hold of me to remind me of appointments, for some reason did not bill out this visit to my insurance. It was only $120, but that's not the issue here. It should have been billed and I was only responsible for my 25% co-pay. At any rate, even though they had contact info, it went to collection. I requested validation no less than 3X. First response was "mere itemization". I objected. Second response I was told "mere itemization" met FDCPA requirements. On the same date as their response letter, they pulled a hard inquiry. I sent #3 letter. This time their response came from an attorney who said they were fully prepared to defend my frivolous claims. On the very same day the letter was dated, they pulled a soft inquiry. THEY NEVER VALIDATED! I see this as two violations, and since Calif law (statutory) provides for $2500 per violation, I figure this is the easiest claim to prove. I've got their letters and copies of my reports showing the dates of the inquiies and they match. It will be interesting to see the judge's take on this. BTW, the accounts are off all reports. It's just the inquiries that remain.
