Debtor loses FCRA case

Debtor loses FCRA case

On Behalf of | Jun 1, 2020 | Collections

Debt collectors in California may be allowed to check your credit as part of an effort to obtain money that they are owed. This is according to a ruling made by the Northern District of Illinois in the case of Stewart v. Credit Control, LLC. In that case, the plaintiff claimed that obtaining his credit information for any purpose other than to offer him credit was a violation of the Fair Credit Reporting Act (FCRA.)

Debt collection is a permissible purpose

It is possible for a party to access a credit report if there is a permissible purpose to do so. According to this court, debt collection is a permissible purpose to obtain information about an individual. It is worth noting that other courts have also held that a debt collector can obtain a debtor’s credit report without violating the FCRA.

Hard or soft credit pulls are permissible

Stewart also claimed that a soft pull of his credit report did not constitute a permissible purpose under the FCRA. However, the court asserted that it did not matter whether a debt collector decided to run a soft or hard pull of a person’s credit. It is worth noting that there is no public record of a soft pull on your credit report. Therefore, if a debt collector reviewed your credit information in such a manner, other parties would not necessarily know about it.

Other claims have yet to be resolved

While Credit Control, LLC, received a favorable ruling in this matter, the plaintiff has taken legal action against a credit report agency and other parties. There have been no rulings in those cases, and there was no mention as to what the basis for these claims were.

At Joshua P. Friedman and Associates, Inc., we are in full compliance with all federal and state laws. Hiring a consumer collections attorney can help you avoid pitfalls that often lead creditors to liability for their collections practices.