Hard vs Soft Pull - is this the stick?

[upinflagstaff]

RE: Consumer Recover Associates, Experian report number:####

Dear Experian:

I recently noticed an inquiry placed on my credit report from Consumer Recovery Associates. Since I did not apply for credit nor for employment with Consumer Recovery Associates I requested that they provide their alleged “permissible purpose” under 15 USC §1681n(a)(1)(B) or remove the inquiry. I am enclosing a copy of the letter sent to them as well as the return receipt showing they did indeed receive this letter.

A copy of my Experian credit report dated 10/01/2008 shows this inquiry in the section titled “Inquiries Shared with Others”. 15 USC §1681b(c)(3) states, “Information regarding inquiries... a consumer reporting agency shall not furnish to any person a record of inquiries in connection with a credit or insurance transaction that is not initiated by a consumer.”

Since Consumer Recovery Associates has not communicated their alleged permissible purpose Experian must remove their inquiry. Under 15 USC §1681b(c)(3) since I did not initiate any transaction with Consumer Recovery Associates, Experian may not include the record of this inquiry on my credit report as it is reported to potential creditors.

I expect that Experian will do what is right under the law and bar Consumer Recovery Associates from receiving my credit file and delete the entry on my credit report within one business day. Once Experian has complied with the law I request an updated credit report be sent to me.

Message Edited by upinflagstaff on 10-05-2008 08:39 AM

[BungalowMo]

Those people sound like a collection agency...do you owe any past/old debt that they may have purchased?

[upinflagstaff]

They may have purchased zombie debt. I was looking for something else in the FCRA and noticed the passage quoted in my letter that would seem to indicate that the CRA cannot report this inquiry as a hard pull. I have mailed the letter to the CRA regarding the non-PP pull (and we can argue whether they do or don't have PP to pull my report) and telling them to recode it so it doesn't display to others who I have actually applied with.

[Anonymous]

If there is an open account, it should be coded as account review (soft pull).

[upinflagstaff]

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@Anonymous wrote:
If there is an open account, it should be coded as account review (soft pull).

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And if there is not an open account? That's where I thought this might come into play:

“Inquiries Shared with Others”. 15 USC §1681b(c)(3) states, “Information regarding inquiries... a consumer reporting agency shall not furnish to any person a record of inquiries in connection with a credit or insurance transaction that is not initiated by a consumer.”

 If I did not initiate the transaction then it should not be shown to pullers of my CR if I read this right. It should be coded as AR or not there at all. I made two arguments in the letter, I'm not sure which, if either, will win.

Message Edited by upinflagstaff on 10-05-2008 08:44 AM

[Anonymous]

I would agree that, if there is no open account, there is no pp, at least as far as some courts have established legal precedent (FCRA is wilfully vague).

However, the way I read the provision you just quoted is also that soft pulls are visible only to You, the Consumer - this provision is in place to protect the consumer from being dinged on Fice credit scoring (or credit applications) by the day to day activity of creditors that review periodically an account. Therefore all ARs (soft pulls) CANNOT be shown to other as part of the credit information that is passed on during a hard inquiry.

[upinflagstaff]

Experian received this letter yesterday. Since I gave them 1 business day to delete or recode the entry (it hasn't happened yet) does someone have an effective ITS letter? Or should I give them another day?

Message Edited by upinflagstaff on 10-08-2008 09:30 AM

[Anonymous]

You can't ask Experian to recode and ITS them for not doing it - they would fall into a FCRA violation. It must be the CA that request the recode.

I would ask EX a formal investigation and proof of permissible purpose. Failing that and based on your response, you can bring action for failure to properly investigate a complaint.

You should also notify the CA of non-PP.

[upinflagstaff]

I think Consumer Recovery is a drive by collector. I sent the copy of my letter to Consumer Recovery to EX. Since I did not apply for employment or credit I am arguing:

“Information regarding inquiries... a consumer reporting agency shall not furnish to any person a record of inquiries in connection with a credit or insurance transaction that is not initiated by a consumer.”

This is in the FCRA. If this isn't a stick to use to recode this hard to a soft then what is it?

[Anonymous]

This is the stick not to show SOFT inquiries to the world and keep them for the consumer's eyes only.

The stick with the CRA is that they are responsible for ensuring permissibility of purpose, or at least code it as it was requested. Upon dispute and request for an investigation, they need to do a little more legwork to check everything was done by the book.

The end result is that the CRA tells you "XXX claims permissible purpose for collection purposes", at that point you tell the CRA that collection is not PP for a hard inquiry and you ITS them for FCRA violation - they should only accept "account review inquiries" for collection purpose.

At this point you also hit the CRA with complaints with BBB, FTC and AG.

You can also start proceeding in Small Claims against the CA, and file complaints against them with BBB, AG and FTC.

Don't hold your breath on BBB follow up - they are starting to bail out on this. I'm investigating how to make more noise about it.