Permissable purpose and small claims

[myfico5378]

If anyone has any suggestions or sample letters and pleadings for inquiries without permissable purpose, I would love to see them.  In September, I refinanced my home with Bank of Oklahoma.  The application was submitted in August, credit checks were completed, and the loan closed September 25th.  On December 7th, CSC Credit Svcs on behalf of Bank of Oklahoma Mortgage pulled a hard inquiry on TU, EQ, and EX.  I called my loan officer and asked why.  He said he didn't know and would call me back.  Knowing that he wouldn't, I called his Supervisor and left a message for her a few hours later.  I also contacted Customer Service and was told that I'd have to speak to my loan officer as they would be the only ones to access my credit.  The Supervisor finally called back yesterday morning and said she didn't know why they would pull my credit months after loan closing as I'm current (pay 15 days early!) on my mortgage.  She then tried to convince me it wasn't a big deal anyway and probably wouldn't have any effect on my score.  I told her I've monitored my scores for years and it did effect them.  I told her that I wanted to know who pulled my credit and why.  She said she'd send an e-mail to Consumer Services and get back to me.  I haven't heard from her.

I found one sample letter on my google search demanding $1000 for each inquiry, but if anyone has anymore, I'd love to see them so I can make sure my letter is perfect.  Assuming I'll have to file in small claims to actually collect, any suggestions on pleadings there would be helpful as well.  I'm pro se in my custody litigation, so I'm a little familiar with the court system, but have no experience with small claims.  I have printed full copies of my CR from each CRA to keep as evidence. 

Thanks in advance!

[DI]

If you currently do business with the company they have the right to pull your reports.  They may have made a mistake making a hard inquiry rather than soft inquiry.  That should be your focus.  A lawsuit doesn't merit.  Getting the hard inquiries changed to soft iinquiries is more prudent.   Good luck

[AndySoCal]

The inquiry that posted on Dec 7th at bureau(s) posted with no permissible purpose. Am I understanding this correctly? 

[RobertEG]

Permissible pulls are governed by FCRA 604.

FCRA 604(a)(3)(A) gives an existing creditor the right to a permissible pull of your CR for purposes of reviewing the account, so it appears to have been a permissibler pull under the FCRA.  Thus, IMHO, you have no beef with the CRA for honoring the inquiry.

The FCRA never uses the terms "hard" or "soft" inquiring, and does not regulate how inquiries are coded for credit reporting purposes.

Most creditors will code account review inquiries as so-called "soft" pulls, but there is no specific satute or regulation requring them to do so.

I would call the creditor and ask them to correct the reporting per their normal business practice, but I see no basis for any legal action against them.

Message Edited by RobertEG on 12-11-2009 09:04 PM

[myfico5378]

I respectfully disagree with your opinion.  The FTC Gowen opinion letter http://www.ftc.gov/os/statutes/fcra/gowen.shtm specifically addresses closed end transactions in which the creditor has no need to review the account as the terms are fixed (i.e. mortgage, fixed rate, fixed term). 

Also, after my post, I received in the mail a letter thanking me for my home loan application and providing my credit scores as required by law when you apply for a mortgage.  Obviously, I have not applied for a home loan as my loan just closed 2 1/2 months ago.  I received the same letter after my application in August which was valid and permissable.

I finally received a call back from the Supervisor at 5:30 pm after I faxed a letter notifying them of the lack of PP, citing the fcra, and requesting payment of $3000 for their violation.  She is now interested in finding out what happened, but claims that she has spoken with 3 different departments and nobody seems to know how to trace the request for my CR or the letter that I received.  She asked me to fax a copy of the letter.  

Besides the 10 POINT dip in my EQ Fico score (notified today by score watch with the reason stating that I have recently been searching for credit), there is a legitimate concern of fraud and/or identity theft in this instance. 

I believe the FCRA provides the $1000 civil liability as compensation to the consumer for a reason and I believe it should be honored.  I consider my time to be valuable.  If I have to take time away from my job and/or family to research something that never should have happened, I believe I should be compensated for that time.  This bank is very well known and has a fairly high reputation in this state, but the customer service in their mortgage division leaves much to be desired.  I believe the Board of Directors will be more likely to notice the incompetence among this division if someone takes a stand against them and request relief which is allowed by law.  

So, back to my original question, does anyone have any experience in pursuing such a claim in Small Claims court?

[DI]

 

So, back to my original question, does anyone have any experience in pursuing such a claim in Small Claims court?

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I have experience settling a lawsuit with a creditor for reporting inaccurate information on my credit reports.  And among other things.  We didn't use the courts.  It was just me and the creditor's attorney. 

There was a time when Bank Of America made a hard inquiry on my EX report for a HELOC.  It's obviously wasn't correct since I do not own a home.  They simply coded the inquiry incorrectly.  I didn't pursue any legal actions becuase it was a simple mistake and I do bank with them. 

Your situation is not much different.  You can pursue a small court claim with your local justice department.  You seem to be willing to put in a lot of time and effort in the matter to get a possible $3000.  Do your research very carefully and get a complete understanding of the law FCRA.  You do not want to be out of paying court fees associated with filing a small court claim and not get a dime from the creditor.  

The FCRA helps the creditors in more ways than you may think.  The FDCPA seems to favor consumers alot more.  

You would have to prove the creditor "INTENTIONALLY" caused you harm through gross negligence.    If you feel the creditor has, then you want to consult with an attorney rather than small court claims. 

[Anonymous]

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@RobertEG wrote:

Permissible pulls are governed by FCRA 604.

FCRA 604(a)(3)(A) gives an existing creditor the right to a permissible pull of your CR for purposes of reviewing the account, so it appears to have been a permissibler pull under the FCRA.  Thus, IMHO, you have no beef with the CRA for honoring the inquiry.

The FCRA never uses the terms "hard" or "soft" inquiring, and does not regulate how inquiries are coded for credit reporting purposes.

Most creditors will code account review inquiries as so-called "soft" pulls, but there is no specific satute or regulation requring them to do so.

I would call the creditor and ask them to correct the reporting per their normal business practice, but I see no basis for any legal action against them.

Message Edited by RobertEG on 12-11-2009 09:04 PM

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+1

In fact, the FCRA doesn't even require that CRA's report the inquiries to anyone but you. They report them to lenders as a matter of company policy, not as a matter of legal requirment.  The FCRA requires the CRA's to report to you anyone having obtained your CR within the past 24 months.

It is also a CRA policy of having 'soft' or 'hard' inquiries, again as a matter of CRA company policy as an arrangement and agreement with lenders and subscribers to their services.

I also agree that if you have an existing  loan with the bank, they may pull your credit under FCRA and I would imagine this was also a part of the terms of your loan application and loan docs.  And there would be no requirement for this to be coded hard or soft.

Therefore, do not become adversarial with the lender since it is you who wants a concession from them.  You need to politely request that they recode the inquires as Account Review (soft).  If you are not successful initially, be persistent, yet polite. 

IMO you have no case that would impose liability on the bank.  In fact if you sued them, you could end up responsible for their legal costs.

[RobertEG]

The FTC Gowen opinion involved a closed account.in which the creditor was seeking to market further business, not to review an open, existing account with them. I dont see any relevant precedent,.

[myfico5378]

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@RobertEG wrote:
The FTC Gowen opinion involved a closed account.in which the creditor was seeking to market further business, not to review an open, existing account with them. I dont see any relevant precedent,.

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Can you please elaborate on your opinion?  The letter in which I referred to above states:

"Current Borrowers

Section 604(a)(3)(A) of the FCRA gives a creditor a permissible purpose to obtain a consumer report without the consumer's consent "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." Section 604(a)(3)(F)(ii), which relates to deposit or other non-credit accounts, similarly provides a permissible purpose "to review an account to determine whether the consumer continues to meet the terms of the account." When obtaining consumer reports for such purposes, creditors need not comply with prescreening disclosure requirements because these transactions are exempt under Section 603(m)(1) of the FCRA.(2)

Your questions raise the issue of whether a creditor in a closed end credit transaction may exploit consumer reports obtained for "review" purposes in order to market its products or services. In the circumstances you described, we believe the answer is "no.". First, "review" is not a purpose for which a closed-end creditor would ordinarily need to obtain consumer reports on its customers. In commenting on the proposed provision which became Section 604(a)(3)(F)(ii), the Senate Committee on Banking, Housing, and Urban Affairs stated:

Like creditors, banks and others may need to consult a consumer's report in order to determine whether the consumer's current account terms should be modified. For example, the institution may provide more favorable pricing terms after consulting the report. The permissible purpose created by this provision, however, is limited to an account review for the purpose of deciding whether to retain or modify current account terms. (emphasis added).(3)

The terms of a closed-end credit transaction are predetermined and generally may not be changed unilaterally by the creditor unless the contract expressly provides for such action (e.g., in the event of default). Therefore, the creditor is unlikely to have a reason to consider "whether to retain or modify current account terms" and, thus, would not have any routine need to procure consumer reports to "review" its accounts. Second, the credit bureau must, pursuant to Section 607(a), require the creditor to "certify the purposes for which the information is sought, and certify that the information will be used for no other purpose." (emphasis added). Because Section 604(a) provides no authority for a creditor (or any party) to use a consumer report for marketing purposes,(4) a creditor would violate its certification by using an existing report in such a manner."

Source:  http://www.ftc.gov/os/statutes/fcra/gowen.shtm

[myfico5378]

Does the FCRA allow a creditor to submit Home Loan Applications on your behalf without your knowledge?