Sued a creditor in Small Claims for Non-PP (soft pull), but lost. Am planning on filing a Notice of Motion to appeal the decision based upon judicial error. Once a Superior Court hearing is scheduled, planning on filing a Motion for Summary Judgement (we are in agreement to the facts of the case). I am working on the case and am trying to pull together all of the caselaw I can find in my favor. What I believe this is going to come down to is this: Did the creditor have a legitimate business need to pull my credit in conjunction with a business transaction?" The creditor was reporting incorrectly and I sent multiple letters asking them to fix the error. Never fixed it, but pulled CR each time they received a letter. I contend that this does not constitute a business transaction. I am using Duncan v. Handmaker and Bakker v. McKinnon. Any other Non-PP cases involving the definition of a business transaction I should look at? Thanks!
A creditor cannot pull a CR in anticipation of litigation, but they may for other business-related or account reviews. It sounds like they're defense is legitimate business purpose/account review. Is the account a closed one? Check out Lexis One. It's not quite as comprehensive as Lexis or Westlaw. However, it's free, and the cases are limited to 1998 and more recent.
Closed account (closed 6 years ago). Account was reporting incorrectly (loan paid in full 6 years ago was showing as "currently 30-days late"). Sent letters asking them to fix this obviously incorrect item. Sent copies of the credit reports it was reporting on for their reference -- no need to check my credit, they had the reports in their hands (beside the fact that they should know what they are reporting). Also verified the account status as correct when disputed with CRA. They claim they need to check the account to know what they are reporting and told the judge that this is the only way they can correct it. Funny thing is, they didn't correct it after they checked it. These pulls were prior to filing the lawsuit. The lawsuit was basically filed in an effort to force them to fix their error (which they only did after I filed the lawsuit, they ignored each and every one of my letters prior to filing). However, I figured if they forced me to file I was going to go all the way.
When they pull an inquiry, don't they have to notify the CRA of their PP for this inquiry, or must the inquiry be in conformity with their certification? Did they tell the CRA that they were "checking on an already closed account", and this inquiry was not under their usual certification, and is the CRAs coding of the inquiry in conformance with this?
Does that coding affect FICO, or is it visible to others who pull your report? Does it give them any access to anything other than their own tradeline?
Does not affect score. Unclear as to the totality of what they receive. Creditor claims only provides their TL, but EXP's website selling this product indicates that it provides a "credit history." Regardless, the creditor presented as a defense a letter from EXP indicating that the pull was a Bullseye Pull and that it required permissible purpose (it actually says it twice in the letter). I THINK Yang v. Government Employees Insurance Company may apply here as well (it basically says that if a CRA "compiled it [the info in your CR] for credit-related purposes and expected it to be used for such purposes" then it is a credit report and protected under the FCRA).
Sounds to me that the small claims judge felt some sympathy toward the company in that the account was 6 years old and bought into the idea that the only way they could find out what they were reporting was to run an inq. However, if the judge had taken your FCRA rights as seriously as we all do, he or she would have been more inclined to hold the creditor to a higher standard of proof. Harmless error is not good enough in my book. The account information is their responsibility. If they don't know what they furnish to CRAs, how in the world are they even able to verify?
Although you might prefer that the judge decide purely on whether this is a statutory violation, he might be reluctant to award damages if the company was trying to resolve your original complaint in good faith, by pulling just their own posting without further damaging to credit scores or visibility to others. The issue of whether the information they received was a "credit report" under FCRA might be ignored by the judge if the information they requested was what they themselves had sent. If however, they at anytime received your full report, and perhaps later requested that the inquiry be "recoded" to appear less invasive, it might fit more directly within the bounds of the statutory penalty. For example, if you have a credit report showing the inquiry as just a normal credit request, followed by a later report showing it as a "bullseye", it might look like they were trying to cover up their original mistake, and although this might lessen further damage from posting the inquiry, the original non-PP pull actually occurred. As the company ignored your disputes for a period of time, how much time did it take to resolve this, how much time and expense on your part, including filing and court costs, and what damage was done by the delay in correcting this mark on your credit? These costs may appear more real to the judge, and the company's failure to act without being sued shows non-compliance with FCRA accurate reporting and investigation requirements, and even if he finally awards based on a statutory penalty, this may swing the decision toward damages.
ontrack - I think you are correct in terms of the judge's general attitude. He actually said something to the effect of "what's the big deal?" However, if I do appeal I am going to go from the perspective of invasion of privacy. I had to fax them a copy of the pulls because they had no internal record of the pulls. Somewhere floating around out in the world are two credit reports with, at minimum, my name, social security number, address, previous addresses, employer, etc. The creditor cannot account for the whereabouts of these reports. I am so tired of creditors, CAs, CRAs, etc. doing whatever they want and being held to no accountability. They violate federal and state laws and if they happen to get called on it, they fix the violation before the court date and the judge seems to think that their "no harm, no foul" approach is just dandy. How many people out there don't have the time, abilities, education, money, etc. to pursue the violatons? If judges would take the time to consider that for every person suing on FCRA, etc. violations there are many more who don't because they cannot or because they aren't even aware that their rights have been violated. Okay, I'll get off my soapbox now.
Re: Re: Need Caselaw Help I think it also might be relevant that each time they pulled the report they did not fix anything. How could this be a good faith effort to resolve the complaint? I spent six months sending them letters, disputing the error and calling them, all to no avail. They didn't even respond to my ITS.
Re: Re: Need Caselaw Help I agree 100% with your sentiment. However, you probably won't find a sympathetic ear from the court. Unfortunately, the jury is out as to whether or not there's a constitutional right to privacy. I certainly wouldn't want to make that argument in front of a state court judge who's accustomed to hearing fender bender and contract disputes. If the small claims judge kicked your case based on the merits, then you should check your state's rules on civil procedure. You might not have a right of appeal unless there was a procedural error on the part of the small claims judge. Or, as you're attempting to do, file another lawsuit alleging different violations of law. What are your actual damages?
Re: Re: Need Caselaw Help In CA, you don't need actual damages. Non-PP pulls are $2500 per pull (or actual damages, whichever is greater). Also in CA, a plaintiff can appeal solely based upon judicial error or clerical error. I realize that chances are slim, which is why I'm looking for caselaw to back up my claim. If I determine that there isn't a lot of strong caselaw, then I probably won't appeal. At the end of the day, the question is: "Is pulling your credit to check on how they are reporting considered permissible purpose?"
Re: Re: Need Caselaw Help Cal. Civ. Code Section 1785.31: The way I read this portion of the statute, you can be awarded actual damages based upon the negligence standard, or punitive damages of $2,500 based upon the "willful" standard. Case law that I've read suggests that actual damages are not necessary to prove liability. However, if you don't have strong enough facts for a punitive damages case--which is where you'd tee up the $2,500--then your case is at best a negligence one. And based upon experience in a somewhat conservative court in Norther CA, the judge will be looking for damages if he or she is going to find liability. If your actual damages are minimal, they're likely going to find negligence; that's if your new complaint can survive dismissal. Just my .02. But for all of our sake, I hope I'm dead wrong.
Re: Re: Re: Need Caselaw Help Hmm . . . I interpret it differently. I interepret the statute to say that actual damages, whether they be negligent (paragraph 1) or willful (subparagraph A of paragraph 2), are determined to be not less than $2500. But I'll be the first to admit that I could be reading it wrong.
Re: Re: Re: Need Caselaw Help Hmm . . . I interpret it differently. I interepret the statute to say that actual damages, whether they be negligent (paragraph 1) or willful (subparagraph A of paragraph 2), are determined to be not less than $2500. Both paragraph (1) and subparagraph (A) of paragraph (2) specifically deal with actual damages. Punitive damages are addressed in subparagraph (B), where up to an additional $5000 could be awarded. But I'll be the first to admit that I could be reading it wrong.
Re: Re: Re: Need Caselaw Help The punitive provision of $5,000 is for willful violations of statutes other than 1785.22 (the permissible purpose statute). That's why 1785.31 (3) distinguishes itself only by providing $2,500 for willful acts re PP.
Re: Re: Re: Re: Need Caselaw Help I guess this is why us common folk avoid the courtroom like the plague. I have read and re-read the statute and do not see where (3) states that the $2500 in actual damages is only for willful violations. As I read it, (3) is basically there to put a price tag on a non-PP pull. And I can't see where it prevents punitive damages. It doesn't mention punitive damages whatsoever, nor does it even refer to them. I'm so confused!
