Impermissible purpose for account review

[Downto0]

I have a JDB making account review inquiries.  I was sued several years ago by this same JDB and their case was dismissed due to lack of assignment.  Before they sued they did an inquiry for collections.

I think the collections inquiry was permissible purpose because it was exploratory.  They never did another one until about a year ago.  They have made three so far.  They may have made more but I won't know until I get another free yearly report from the Big 3 as my 3in1's from a third party, for some unknown reason, don't show these account review inquiries.

I understand that a JDB has pp under 604(a)(3)(A) for collection of an account but I don't believe they have pp for account review as there is no account for them to review.  The debt that they bought has frozen terms from the day of last delinquency.  There would be no purpose in reviewing an account to see if the account holder is meeting the terms of the account.

It is my belief that this JDB knew that they did not have assignment of the debt and that I was monitoring my cr so  they made a soft pull so as to not alert me to their snooping.   I did not notice the inquiries on my monthly 3in1 and almost did not notice the inquiries on my yearly report from Transunion.  I had actually looked at the Transunion report without seeing the inquiries for about 6 months because the inquiries were sandwiched in with the normal account reviews.

I don't see where this JDB would have pp for account review as their purpose of buying the debt was to collect.  The account itself never has been listed on my cr nor has this JDB listed the account themselves.

I want to send a pp letter to Transunion but I don't know that they are required, by law, to answer.  The 623/611 method is for erroneous account information, not inquiries.  I could send a pp letter to the JDB but I feel that they would just ignore me.  These inquires are soft and don't damage my credit score but the point is that the JDB does not have pp to be viewing my file and the FCRA, under 616(a)(1)(B), specifically disallows obtaining a consumer report under false pretenses or knowingly without a permissible purpose.

So my questions are, (1) does a JDB have pp for account review? (2) does a JDB have pp after failing to provide assignment?  (3) is Transunion legally bound to answer my pp letter?  On the last question, I know ip is not legal but I don't read where a pp letter has to be legally answered as with the 611/623 method.

[pizzadude]

Hi !  Welcome to the formus !  Can you provide some additional information ?

    ----> I was sued several years ago by this same JDB and their case was dismissed due to lack of assignment.

Was the CA's lawsuit dismissed with prejudice ?   If so they would be barred from taking any additional legal action against you regarding this debt.

If this is the case, then you could send them a non-PP FOAD letter, politely asking them to go away. 

I do not know if you would have grounds to possibly sue them for violation of PDCPA, it depends on the specifics of your state's SOL and the recent lawsuit.

In theory, an CA can attempt to collect a debt forever - they just lose the ability to sue you when SOL expires.    What is your SOL for this debt and has it passed ?

If it were me I wouldn't worry too much about soft pulls on your credit file, if this CA can't sue you then they are just annoying you, but not causing any real FICO harm.

If the CA decides to do a hard pull, then I would definately consider taking some sort of action.

[RobertEG]

In my opinion, if they have no assignment of authorized collection authority from the current owner of the debt or they do not themselves own the debt, they do not have a permissible purpose under FCRA 604(a)(3)(A).

Section 604(a)(3)(A) refers to "an account of the consumer."  While not explicitly stated, if they dont have legal authority to collect on an account of the consumer, then they logically dont have a permissible purpose to access your credit file.

When a party requests your credit file, they must, pursuant to FCRA 604(f)(2), and more specifically, section 607(a), provide a certification of their permissible purpose and certify that it will be used for no other purpose.  That self-certification is provided to the CRA as a condition for granting their request for access to your credit file.

To discover the stated permissible purpose they provided to the CRA, you can file a request under FCRA 609(a)(1) to the CRA, and they must provide you that information.

Requests under section 609(a)(1) require that you provide the CRA with proof of your identity and the required processing fee, which is currently $11.00.

Once you have that information, you can dispute its accuracy.  Any dispute related to credit inquiries must be filed through the CRA, as disputes related to credit inquiries are exempted from the direct dispute process.

[Downto0]

pizzadude, a lot of water has flown under the bridge with this JDB.  They sued both my wife and I in 2007 and their case was dismissed without prejudice.  They apparently sued her too because she was an authorized user.  I saw them including her in the collection of my alleged debt as an underhanded tactic to fluster her so that she would pressure me to just paying the debt..

Cutting to the chase, the JDB never refiled and they fell silent for 18 months as I had explicitly sent them a Cease Communications order.  Enough time elapsed and the debt became time-barred.  18 months after the court battle and their silence, the JDB started sending me "tax season specials" and making dunning phone calls concerning the same alleged debt.

Originally, I had sent three CC orders to their attorney and specifically stated in our counterclaims that the letters were sent and apparently ignored by the JDB as their attorney kept contacting me outside of court proceedings.  Remembering these events, I understood that the JDB would not Cease Communications simply by me asking so I sent them a more stern warning in the form of an Intent To Sue letter.  Now they are silent again.

After I sent the ITS, I then noticed the inquiries on my cr for account review.  I don't think they have any business (pp) shuffling through my personal finances for account review because they have no account to review where the terms can be changed according to how I conduct myself with other creditors.  The FCRA is not clear as to whether a JDB has pp for account review under section 604(a)(3)(a) because of the wording, "review or collection of an account". 

This is my main question, "Does a JDB have pp for account review when they have not listed an account on the tl nor have an active account where the terms could be changed according to the consumer's conduct with other creditors listed on the cr.

Yea, I know.  Long question but I tried to apply all the contingencies I could think of to cover any possible pp.

In my opinion, if they have no assignment of authorized collection authority from the current owner of the debt or they do not themselves own the debt, they do not have a permissible purpose under FCRA 604(a)(3)(A).

Section 604(a)(3)(A) refers to "an account of the consumer." While not explicitly stated, if they dont have legal authority to collect on an account of the consumer, then they logically dont have a permissible purpose to access your credit file.

Robert, this is my opinion too.  The counter argument is that just because the JDB chose not to spend the money to buy assignment does not establish that they do not have assignment, thus pp.  My counter to that counter is that they were asked to provide assignment in a public forum (court) and did not.  Now they are continuing their collection activities without providing valid assignment including pulling at least three cr's.

My analogy is that if you and I were to drive down the road without our license or insurance card and we were stopped at a traffic check we would not be allowed to drive home until we provided the police officer with at least the insurance card.  The officer could call on the license but not the insurance and it may cost him his job if he allowed us to drive off without having provided insurance coverage. 

The analogy being that the JDB is continuing its collection activities without a license/insurance (assignment) and should not, according to the law, have  been allowed to do so until they had provided assignment (license/insurance).  I think that they know this and is why they are doing silent pulls rather than using the obvious hard pull of collections.

This is another question I have.  What makes a pull hard or soft?  I've seen both collections and account review both as hard or soft pulls.

To discover the stated permissible purpose they provided to the CRA, you can file a request under FCRA 609(a)(1) to the CRA, and they must provide you that information.

Requests under section 609(a)(1) require that you provide the CRA with proof of your identity and the required processing fee, which is currently $11.00.

Once you have that information, you can dispute its accuracy. Any dispute related to credit inquiries must be filed through the CRA, as disputes related to credit inquiries are exempted from the direct dispute process.

Sounds like a good plan.  I'm going to give the sections you quoted a good read and draft up a pp letter.  One thing, I haven't read in either 611 or 623 where a consumer cannot dispute an inquiry.  611 specifically states "any" information.  I look at the inquiry as information provided to the CRA and copied to the tl that the JDB has pp for account review.  I have court documented evidence that this information is inaccurate.

I don't know that I am right or that you are wrong...just plain reading of the FCRA text with no FTC opinion or case law to establish either opinion.  Believe me, it's not for a lack of research.  this is why I am here asking questions.

[RobertEG]

The direct dispute process has been in the statute as section 623(a)(8) for about about a decade. However, when enacting the statue, congress specified that it would not become effective until rulemaking was held and  implementing rules were published by the designated federal agencies.  See FCRA 623(a)(8)(A)-(C).

Those regulations were finally published in the Federal Register on 7/1/2009, setting an effective date of 7/1/2010.  See 3184 FedReg, Vol.74, No. 125, 7/1/2009.

Those regulations have now been incorporated into the Code of Federal Regulations at 16 CFR 660.4, and have the effect of statute.  Accordingly, the "nuts and bolts" details of the direct dispute process are found at 16 CFR 660.4 rather than in the FCRA itself.

16 CFR 660.4(b) specifies certain items that are exempted from the provisions of the direct disptue process.  Direct disputes relating to inquries or requests for a consumer credit report are specifically exempted under section 16 CFR 660.4(1)(iii).  That leaves the dispute process through the CRAs under FCRA 611(a) as the only avenue for dispute of credit inquiries.  This interjects the CRA into the process, and gives them the ability to verify the filing of a statement of permissible purpose by the requestor as their legitimate basis for honoring the credit inquiry.

As for what is and is not a "hard' credit inquiry, the FCRA is silent as to such terminology.  It addresses permissible purpose, and not how the purpose is coded wthin the CRA.  The hard and soft credit inquiry codes were created by the CRAs to provide those reviewing credit reports some idea of the purpose of a credit pull.  Thus, there is no statutory basis for disputing CRA coding other than it must accurately reflect the stated permissible purpose.  What is commonly referred toas a "hard" inquiry is one that FICO chooses to score, while the terminolog 'soft" inquiry refers to those types of inquiries that FICO has chosen not to include in their credit scoring.

With no recourse to the direct dispute process, the dispute of inquiries is essentially limited to contesting through the CRA whether the requestor had a legitimate permisible purpose under one or more sections of FCRA 604.  The CRA is essentially bullet-proof to such disputes provided they have of record in their files a self-certification of permissible purpose provided by the requestor.  You must obtain a copy of the requestor's self-certified statement of permissible purpose and challenge its accuracy to prevail under the FCRA.  By the time you run that course, the one-year period after which FICO discontinues the scoring of all inquiries has normally expired, making it a pursuit of dubious benefit.

[Downto0]

Very informative. I noticed that it was left up in the air that rules would be created to support the 623 section. I haven't read your source yet but I will.

I'm not looking for an avenue to sue the CRA as I don't see them at fault for the JDB supplying false information for pp. What I am looking for is some authority where the CRA and/or the JDB are required to reply to my dispute about the inquiries. I understand that I can pay for the pp under FCRA 609(a)(1) and pay a $11 fee but I don't feel that I should be forwarding any money to correct false information contributed by the JDB. Call me cynical but I see the CRA's as manipulating the system to make more profit on commonly made mistakes by JDB's and other collectors. I don't want to feed the beast. I probably will, however, end up paying the $11 as a last resort to resolve this issue.

My plan is to get the pp provided by the JDB then ask the CRA why the JDB would have pp for account review when they are actually collecting a debt.   I don't see any point of contacting the JDB until I can establish, through the CRA, that the JDB did provide false information to the CRA. The JDB isn't going to forward any helpful information, if they even answer at all. Transunion, on the other hand, will want to steer itself away from any possible lawsuit and should tell me exactly what the JDB gave as pp and, with court documentation I will send, hopefully confirm that the JDB did give false information.  At any rate, I will get them on record as to what their position is.

In my research, I found many sites which said that you can't dispute inquiries, others which said that some CRA's will dispute inquires while others won't, and this interesting statement from Truecredit.com, an affiliate of Transunion:

You are allowed to dispute inquiries on your credit report, but it can be difficult to prove that the inquiry is indeed inaccurate. If you are unsure of where an inquiry came from, try contacting the company listed before sending off a letter of dispute.

http://content.truecredit.com/LearningCenter/welcome/inquiries.page

The last sentence pretty much clarifies that they are talking about disputing with the CRA's. It would be interesting to contact them for their source but one could assume that it came from the horse's mouth, Transunion. I may end up chasing this rabbit if Transunion gives me the runaround.

I'll keep you guys posted as I think this issue is of great interest to others frequenting this forum.

[RobertEG]

If you dispute through a CRA, they MUST conduct an reinvestigation of the dispute, with only one statutory exception.

FCRA 611(a)(1) states, in pertinent part, that "if the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed...... the agency shall, free of charge, conduct a reasonable reinvestigation."

On the other hand, FCRA 623(a)(8), which authorizes the direct dispute process, leaves the Federal rulemakers with the responsibiity to determine "the circumstances under which a furnisher shall be required to reinvestigate a dispute."  They have provided those determinations at 16 CFR 660.4(a) and (b).

The only reason a CRA is authorized to refuse to conduct a reasonable reinvestigation of a dispute made through them is that if they provide a finding under FCRA 611(a)(3) that the dispute is "frivolous or irrelevant."  There is no statutory or regulatory precedent holding that disputes relating to credit inquiries are ""frivolous or irrelevant."

As an example, the new rules for the direct dispute process include, at section 660.4(f), definitions of what are considered "frivolous or irrelevant" direct disputes.  Credit inquiries are not included under that section, but rather are treated separately under section 660.4(b).

Thus, I see no basis for a CRA to refuse to investigate credit inquiries posted to your credit file/report.

[Downto0]

Yea, I agree with you but I have been reading reports from consumers that Transunion did refuse to honor a dispute.  However, it's possible that those consumers were disputing under the authority of 623 which you have adequatetly explained that any CRA can refuse to involve themselves.  But, it is possible that Transunion has stretched the exemption from 623 to erroneously cover 611 also.  So, I plan to start out invoking 611 to Transunion and explain to them that I know that there is an exemption in 623  for investigating inquiries but that there is no such exemption housed in 611.

It's also been suggested to me that Transunion my say that inquires are not information supplied to them, that they are "statements of facts".  I think the idea is that it would be the same as a data furnisher's address, for example, where that information simply states a place where the consumer, or any other interested party, can contact the data furnisher.  The idea would be that these statements of facts are not information involving the tl and have no affect on the tl itself.

I know that it is not binding but I plan to send a copy of Truecredit's statement that inquiries can be disputed and tell Transunion that Truecredit does not go into detail but they must have been referring to 611 as we know inquiries cannot be disputed using the 623 process.  I also plan to tell them that I see the data furnisher as the only responsible party for providing false information to Transunion and that I am only asking Transunion to reinvestigate the pp which the data furnisher gave to them.

I also plan on sending two court rulings where the judge plainly stated that the JDB (data furnisher) did not provide assignment and that court of law opined that the JDB could not proceed in its collection of the alleged debt until it provided assignment.  At this point, Transunion should understand that the JDB had no pp and knowingly provided that they did have pp.

My other argument is that even if the JDB would normally have pp for collection of an account, they would never have pp for account review where I never initiated a transaction with them.  The account they purport to have purchased all right to collect upon would be pp for collections, not account review.  I do have case law and FTC opinion that there is no pp on a closed account for account review because there are no terms to review via a cr to see if a consumer is abiding by those terms.  The debt which the JDB purports to have purchased is closed and there are no terms to review.

You've been very helpful as I now know who I should contact first and what I should say.

[RobertEG]

Inquiries are definately an item of information contained in your credit file.  Those items include the request and certification provided by the requestor to the CRA, and the CRA's record of their grant of the request by sending them your CR.  To assert that they are not items of information in a consumer's credit file approaches absurdity when the CRA thereafter includes a record of that inquiry in subsequent credit reports they issue. 

That dawg wont bark.

[Downto0]

To assert that they are not items of information in a consumer's credit file approaches absurdity when the CRA thereafter includes a record of that inquiry in subsequent credit reports they issue.

Good retort.