Calling credit reporting experts, question about permissible purpose

[bass_playr]

Hi All, 

Quick question about permissible purpose.  I had a furnisher that was reporting on my credit, on one bureau only.  I caught them re-aging the account and finally applied enough pressure that they removed all their reporting from my credit.  The account is too old for them to continue reporting.

So I pulled my free annual reports today.  The account in question came off my reports in September.  On two occasions since it was removed, this same party has pulled my credit.  My question is this---since they no longer have any right to be on my credit, do they still have permissible purpose to pull my credit like that?  I was under the impression that permissible purpose no longer exists if the account is too old to remain on the report.

Thanks in advance....

[RobertEG]

Obtaining a credit report from a CRA is the opposite of furnishing information to a CRA.

It is requesting to review a report of what others have furnished.

Permissible purpose is required in order to obtain a consumer's credit report.

It is covered under FCRA 604, and includes no provisions that prevent a party from requesting a credit report based on whether or not certain adverse items of information are prevented from inclusion in that credit report.

The credit report exclusion provisions, all of which are set forth in FCRA 606(a) through (c), likewise do not exclude a party from obtaining a credit report.  Section 605(a) includes restrictions on what a CRA can include in reports they issue, and is not a prohibition against providing credt reports per se based on exclusion of individual adverse items of information.

In fact, alll of the normal exclusion provisions of section 605(a) are exempted under some circumstances, and thus are not absolute.

See FCRA 605(b).  If a consumer, for example, initiates a request for credit in an amount of $150K or more, that provides the creditor with permissible purpose to obtain a full-file credit report without any exclusions, and thus the exclusion provisions of section 605(a) would not apply, and clearly would have no effect on obtaining the consumer's credit report.

The answer to the question is thus that credit report exclusion can control what information is provided by a CRA, but is not blanket basis for preventing a CRA from providing a credit report that excludes items that are prevented from continued inclusion under section 605(a).

Permissble purpose still exists for the report per se.

[bass_playr]

Robert, 

Thanks for the clarification.  Follow up....if I sent this particular debt collector a cease and desist demand, would they still have permissible purpose?  Since the account is outside all applicable SOLs and a C&D would prohibit them from any communication with me, they would no longer have any legal means by which to attempt to collect anything.  I do know that not all states consider credit report activity to be "communication" under the FDCPA.

Back story, this debt collector actually tried to sue me, twice.  The first time, the court dismissed their case because they tried to sneak a lawsuit through without ever having me served.  The second time, the case dragged on for nearly 6 years because I fought it.  I was able to win--got their case dismissed because they abandoned their claim under my state's laws.  I have a claim against them that's still in progress in the court, since they fabricated paperwork, lied to the court, re-aged this on my credit reports, and committed other fraud.  They tried to get that claim dismissed and the court denied their effort.  So, since the SOL for suing is past, they can no longer take legal action.  Since the reporting SOL has passed, they can no longer report on my credit.  About the only thing they have left is to keep pulling my credit, which is now happening.  

Since the "account" is not even real, as in, it only exists on paper, I never had any account with these clowns, the fact that they can still hard pull my credit means they can still have a presence where potential creditors can see them.  

[RobertEG]

Yes, a debt collector still has permissible purpose to pull your credit report after you send a cease communication letter under FDCPA 805(c).

A credit inquiry is a communication with a CRA requesting a copy of your credit report, and has permissible purpose under FCRA 604(a)(3)(A).

It is not a communication from the debt collector to the consumer, and thus is not barred under FDCPA 805(c).

 It is an example of the distinction between a cease and desist demand and a cease communication bar under the FDCPA.

A consumer cannot unilaterally, without any statutory support, order a debt collector to cease collection activities apart from continued communications with the consumer, that are otherwise legit business practices.

Neither expiration of SOL nor credit report exclusion discharges the debt, and is not basis per se for barring a debt collector from continuing to pursue other legit activities to collect the delinquent debt.

Termination of permissible purpose for a debt collector to receive your credit report  occurs after the debt is discharged, as there is no longer a delinquent debt, and thus no longer any active collection authority for the debt collector to continue any collection activites.

Until then, unless there is some state law or regulation barring credit pulls, the debt collector is not barred from monitoring your credit.

[Anonymous]

I think the OP is trying to find out under what grounds do they still have permissible purpose to request a report? The debt is too old to collect on (apparently). At what point do they loose permissible purpose? If the answer is never, then that would be a path to identity theft. Someone could buy a 10 year old $100 debt and request your current credit report.

[RobertEG]

Permissible purpose for a debt collector to request a consumer's credit report exists as long as the debt collector has current collection authority on the unpaid debt, either by an active assignment of collection authority or by their ownership of the debt.

Upon expiration of their active collection authority, their permissible purpose to obtain the consumer's credit report would also terminate.

That would occur if either the owner terminates the assignment of collection authority, of the debt collector owns the debt and sells it to another, or the consumer pays the debt.

A debt is not too old to continue to attempt to collect based on expiration of ability to obtain a civil judgment or on exclusion of a collection from the consumer's credit report.

Addisitonally it is not theft of a consumer's identity to pull their credit report for purposes of reviewing the consumer's current credit status.

Federal statute (FCRA 604) expressly permits a party with collection authority to access a consumer's credit report.

[bass_playr]

Robert, 

Thanks again, as always.  Your knowledge is incredible...

If I may, I'm going to throw another wrench in the works.  The alleged debt is supposed to be based on a promissory note.  Now, I've demanded to see the actual note, and they claimed at first that they had it and could produce it.  Then, as we got later into the litigation, they admitted they had no note.  They first claimed they lost it.  Then they claimed that a prior creditor lost it.  It's not even a legit debt, which became more and more apparent as the lawsuit progressed.  Honestly I cannot believe it took this long for something to get done in the courts, because their own documentation proved them to be lying about half their claims and said nothing about the other half.

The reason why I mention this is because in my state, there is precedent that once the state SOL on a promissory note has expired the note is actually "unenforceable".  There is case law on the books where the note and underlying security interest were actually extinguished by the courts because once the SOL passes it's not enforceable.  I know it does not change the info you provided, but it looks like I'm just going to have to wait it out and watch them pulling my credit until I get to that point in my own case where the court extinguishes it....then, they should no longer have any permissible purpose.  Thanks again all for your input.