[Enigma]

Sale of Credit Report for Impermissible Purpose May Invoke Liability


Appeals court held that a credit reporting agency may have had grounds to suspect that a request for a credit report for "account review" was not a valid request since the consumer had no dealing with the company in question for four years.
Topic

C A S E S U M M A R Y
Facts

Levine opened a store credit card account with Structure, a clothing company. The account was operated through World Financial National Network Bank (World). Levine paid the account in full and closed it. That fact was shown on his Experian credit report. Four years later, Experian sold Levine's credit report to Structure which told Experian it wanted the report for "account review" purposes. Levine filed a complaint in federal court against Experian, Structure, and World, contending violations of the Fair Credit Reporting Act (FCRA) for the request and sale of a credit report for an impermissible purpose. The trial court dismissed the suit. Levine appealed.
Decision

Reversed and remanded. Levine has stated a claim for a violation of the FCRA, so the suit should not have been dismissed. A consumer reporting agency can violate the FCRA by complying with a former creditor's facially valid request for a credit report, if it has reasonable grounds to believe that request is being made for an impermissible purpose. The fact that Levine's account with Structure had been closed for four years might have given Experian reasonable grounds to believe that the creditor wanted the report for impermissible purposes. That issue will be reviewed at trial.
Citation

Levine v. World Financial Network National Bank, 437 F.3d 1118 (11th Cir., 2006)

[apexcrsrvc]

Wonder what the underlying cause for the action was. I just can't wrap my head around folks suing over one inquiry whether it be a non-permissible purpose or not. This inquiry must have dropped his Experian score low enough to cause some damage.

Or, the Plaintiff may just have elected to pick this one in particular as a premise to institute a civil action against Experian for failing to re-investigate inquiries for any reason. Their whole couching of inquiries as "statement of fact" has always availed them to liability.

[jlynn]

You don't have to have damages for non permissible purpose. Its a separate 1K penalty for the fact they pulled with no pp. It is interesting that he sued Experian. FCRA says both the consumer and the CRA are entitled to 1K.

Home Depot ponied up for me a long time ago for the exact same complaint as the plaintiff in the above - I didn't need to sue.

[apexcrsrvc]

I know that under the statute you don't need damages. That is why I was stating that I couldn't get my head around it; i.e., suing for 1k. I could see doing so with common law claims which would not be necessarily capped.

Then again, I tend to look at everything from a business perspective. Moreover, I would take 1k for a phone call and absent a complaint.

[zumbel]

I wonder whatever happened to this case? Did they settle?