pulling credit without proof of assignment?

[quest208]

first of all, its possible im posting this in the wrong forum section.  but i think i was reading a thread in this part of the forum where someone mentioned how a collection agency (or junk debt buyer) was spanked by the court for pulling someone's credit report without first having proof of assignment of the credit card debt or without owning the debt first.

does this ring a bell to anyone?  i am very interested in that court case as it relates to credit cards and assignments of debt and the ability to pull someone's credit, etc.

i thought i bookmarked that thread, but i am having trouble finding it

[Anonymous]

I would like to know more on this too. Just had a collection company pull my credit last week. I have no idea who they are.

[Downto0]

I have not found any non-assignment pp court cases as of yet nor have I read a thread where a poster is or has sued for such but the general opinion of the the people I have asked think that there is no pp if a court had ruled that the collector did not bring assignment to court and their action against the consumer was dismissed for that very reason..  There is a counter opinion that not having assignment in hand does not mean that the collector does not have the assignment in the first place. 

It seems that I might be putting forth a test case as I believe that I will be suing for FCRA ip charges.  Currently, a NACA attorney plans to file for FDCPA violations and Intrusion upon Seclusion against a JDB for me.  We are also working on the ip angle for inquiries.  TransUnion is stonewalling me about the inquires that the JDB made and may be brought into the fray.

I will be posting updates.

[RobertEG]

Good thread. It raises some interesting issues regarding debt collector permissible pull authority.

I have often wondered about the interpretation of FCRA 604(a)(3)(A) as it regards debt collectors.

The statute reads, somewhat ambiguosly in my opinion, as follows:

"To a person which it has reason to believe intends to use the information 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..."

I know this is the statutory provision relied upon by debt collectors as permissible purpose, but this section of statue is limited to "an account of the consumer."

Debt collectors dont have an account with a consumer.  They have a representational agreement with the creditor.  The only "account" they have is their collection, if any, reported to a CRA, and that is strictly between the debt collector and the CRA. The consumer is a third party to a collection reporting.

The statute additionally states that the information is "in connection with a credit transaction involving the consumer."  Consumers dont have a credit transaction with a debt collector.  And the statue uses the conjunctive "and" after that phrase which upon literal meaning says they have to have a credit transaction with the consumer AND are involved in the extension of credit or collection of credit on "an account."

A recent case decided by the U.S. Court of Appeals for the Ninth Circuit, Pintos v. Pacific Creditors Association, No. 04-17485 (April 30, 2009), has held that the Fair Credit Reporting Act (FCRA) does not give a creditor the right to obtain the credit report of a consumer in determining the likelihood of collecting a debt unless the debt has either arisen out of a transaction for which the consumer actively sought credit or been reduced to judgment. That would appear to affirm their right as haven "arisen" out of a transaction.  Cagey wordsmithing.......

[Downto0]

It has been my understanding that an OC assigns all rights to collect an account to a collector as if the OC were collecting the account themselves, that the transaction spoken of here was with the OC and that transaction passes on to the collector with assignment, and that the account being assigned to the collector becomes the collector's for the purposes of collecting the debt.

I've read and debated the Pinto's case several times.  Pintos' car was impounded and then sold to pay for incurred costs.  The sale did not cover the costs.  The people who impounded and then sold the car sent the unpaid balance to a CA.  A cr was then pulled under these circumstances. The reason there was impermissible purpose in this particular case was because Pintos never said that it was okay for someone to take her car and sell it to cover incurred costs.  The merits of the case would not apply to most debtors as most debtors did initiate a transaction with the OC whereas Pintos merely did not involve herself...she simply abandoned her car and she had no input with the decisions made after the abandonment.

I looked up the Hasbun case which was cited as an authority for collections under  604(a)(3)(A) in the Pintos case and this case may be a retort to a collector not having an account:

Under § 1681b(a)(3)(A), Experian was permitted to release Hasbun's consumer credit report to the BFSO if the BFSO requested the report "in connection with ... [the] collection of an account" of Hasbun. 15 U.S.C. § 1681b(a)(3)(A). "Collection of an account" is nowhere defined in the statute, and the legislative history is not enlightening. But the limited case law addressing this issue has uniformly held that creditors have a permissible purpose in receiving a consumer report to assist them in collecting a debt. In other words, collection of a debt is considered to be the "collection of an account."

I personally think a collector has pp for collections of an account but only for collections.  I don't think they have pp for account review as the account is closed and there would be no reason to review the account to see if the consumer is abiding by its terms.