If you are in a situation where you have collections on your credit report this may be a familiar situation: ever look at your credit report and notice that there are lots of inquiries on it from collection agencies? There shouldn’t be, or at least that’s what the 9th circuit court has ruled. In my opinion, many people get overly concerned with inquires on their credit report, but the fact is that excessive inquiries hurt you.
The 9th Circuit Court of Appeals recently decided Pintos v Pacific Creditors Association in January of 2007. In the facts of the case, the Plaintiff’s (Ms. Pintos) car was towed. She failed or refused to pay the towing company so they sold her car at auction. Apparently, the car did not fetch enough money to pay her towing bill. (I wonder what kind of car she owned that would not fetch the price of the towing bills?!)
The towing company turned the remaining debt (the difference between the auction price and the towing bill) over to Pacific Creditors Association (“PCA”). During collection activities, PCA pulled Ms. Pintos’ credit report. The 9th Circuit held that this was a mistake. Under the Fair and Accurate Credit Credit Transactions Act (“FACTA”) the newest revision of the Fair Credit Reporting Act, a collector may only pull a credit report in connection with a “credit transaction.” Ms Pintos did not ask or apply to the towing company for credit, an important legal distinction. Ms. Pintos lost her claim at the trial court but not in the 9th Court of Appeals.
This case could be important as a defense if a collection agency is suing you. It could get you some money as well should you decide to sue over the FCRA violation. In my opinion, the information that a collection agency has pulled your credit report is just another tool in dealing with them and possibly getting rid of the collection on your report all together, rather than a method of cleaning up inquires.
Who else has had excessive inquiries on their credit report from collection agencies? Leave a comment!
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I was a co-signer for my mother for an apt in Scottsdale, AZ in 2006. The lease was broken and now I have a Judgement on my CR for over $3600. A collection agency by the name of US Collections West has pulled my credit four times:
10/2/2009 with Experian
10/5/2009 with TransUnion
10/8/2009 with Experian (again)
1/13/2010 with Experian (again)
Is this legal? What can I do about it? I read a bit about this 9th District- Does it apply in New York State. Please Help. Thank you.
George
I just do not understand when I read articles like this were they say that a collection agency can not pull your credit report. I would like them to explain exactly why they say this is true. Under the FCRA 15 U.S.C. § 1681b. Permissible purposes of consumer reports it reads as follows:
(3) To a person which it has reason to believe—
(A) 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; or (this gives the collection agency the right to pull your credit report)
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the consumer’s eligibility for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant’s financial responsibility or status; or
(E) intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the information—
(i) in connection with a business transaction that is initiated by the consumer; or
it goes on and on but I have talked to 8 different attorney’s who all tell me the same thing. That a collection agency can pull your credit to get information on you as far as employment and any type of accounts that may lead them to your bank accounts. If there is another way around this in order to stick it to them. Please someone let me know what I am missing.
With regards to Linda, the collection agent above, she fails to understand privacy rights. Hence, that is why a waiver is required to obtain your credit report. Nobody in their right mind would sign an authorization for a collection agency to obtain their credit report. Hence, the case law above.
Collection agencies/agents always try to make illegal conduct-legal. No go. Stop pulling reports. Find other ways to dig dirt.
Interiesting reading, I also have had a certain collection company 3 times in less then a year pull hard inquiries on my credit. They are pulling it even though they are not on my report they claim they are seeking monies for something that is over 8 years old at best.They are obviously trying to lower my score by flooding me with hard pulls, this is being done with impunity and the blessing of the big 3 credit agencies,Is there a law that protects us from such outrageous methods of behavior , they even did hard pulls one month apart. what is the logic for that… inquiring minds wish to know.oh well keep up the good work on this site i find your column quite refreshing.
There’s a debt collector who has filed a suit against me for an alleged debt. They never sent me the documents required to verify but the interesting part is their letter was dated Nov. 10, 2009 and when I reviewed my Equifax credit report this debt collector requested my credit report on the exact same day. (11-10-09) The last paragraph of the letter stated “At this time, no attorney with this firm (they are a debt collector) has personally reviewed the particular circumstances of your account” Is this false and misleading information, seeing as they pulled my report the same day they sent the letter?
Sanmogirl…..dying to know what was your outcome???
FYI…COURTS WAIVE FILING FEES IF INDIGENT.
Thanks for the info, Speed!
I do understand what you are saying about privacy rights. I guess I am just so upset over collection agencies being able to pull hard copies. I had one pull a hard copy of my credit report then the following day they supeonad America First because they say that I was a co-signer on a loan. I have talk to 3 attorneys in Utah they all say the same thing. It is perfectly legal. It has really gotten my blood boiling. Not to mention in Utah they don’t have to validate debt. They could scribble the amount you owe by hand on a piece of paper and the judge would accept that. There needs to be some serious change.
Wow, i feel so violated. Some law firm collection company just pulled my credit report and I did not give them permission. Actually, i do not even know who they are. All i know is that my credit was just pulled with Transunion, without my permission, and I am pist off. I am seeking an attorney because i know that there must be some sort of law protecting me from such agencies. Does anybody have attorney friends in the NYC area that may be able to help?
I know someone dealing with the same issues of collection companies pulling their credit. I pointed them to this website and told them to use the helpful information to remove the inquiries.
I read through the Pintos v Pacific Creditors, and being that the decision was overturned in their situation involving a towing bill and no credit transaction had taken place, how can this apply to a debt with a credit card that is placed for collections? as there was a credit transaction that took place between the debtor and the creditor, before going to collections?
As a company that provides inexpensive credit repair to the poor I thank you for the insight as to the legality of collection agencies pulling clients credit reports. I have started using this tool and received good results in four case.
I am Mrs Pintos’s lawyer in Pintos v. Experian. Steve (Nov. 10, 2010) is correct. The collection agency has a permissible purpose to obtain a consumer’s credit report if it is collecting on an account that arose out of a “credit transaction involving the consumer.” The word “credit” refers to an agreement that is entered into voluntarily by the consumer where the creditor sells goods or services to the consumer and the parties agree that the consumer will pay for those over time, not immediately. The towing deficiency claim that the collection agency was trying to collect from Mrs. Pintos did not originate in a credit transaction involving her because she did not voluntarily have her car towed and the parties had no agreement to defer payment for the towing charges.
Amazingly some collection agencies are still pulling credit reports to aid them in collecting on towing deficiency claims and similar claims, like taxes or liens. We are interested in talking with consumers who have such claims against collection agencies and the credit bureaus that furnish the reports.
What if you incurred your bills in the Emergency room. Would that count as “credit” and be admissible for a reason to pull credit by a collection agency? I have allot of medical debt, most of which were E.R. visit’s. Does medical count?
@John-medical debt does not constitue as credit and thus the collector should not be able to pull your report. Medical debt can be turned to collection if the hospital feels you are not paying enough, even if you are making attempted payments. The best thing to do is settle with the hospital and possibly file for financial aid before the account goes to collection.
Question:
Consumer item purchased in 1993. Item paid 1996, to collection agency as Bruners was in bankruptcy. Same time, paid off ALL other bills, one with PRA.
2000 – Debt, though paid, sold to PRA. Address reflected as 1995 address and not address on PRA account in Dec.of 1996.
Letter sent to 1995 address in 2000. Another, they state after 2004 and one in 2009. All sent to 1995 address and not the latest address they had on file with PRA.
August 2010 – Applied for Reconsolidation of home loan. PRA performed credit inquiry. September, 2011, PRA again performed credit inquiry after being told there was no debt and it had been paid. PRA told not to contact further.
November 2010 – Loan denied due to too many credit inquiries (only ones in 2010 were PRA)
March 2011 – PRA again pulls credit inquiry.
When individuals call, they state, “Don’t you pay your bills?” “Its your debt.” etc.
The bill was paid 14 years ago and they are demanding proof of payment. When asked if they have copies of cancelled checks from 14 years ago, they state they do online banking…they are nicely informed, online banking did not become a practice with many banks until after 2000.
Legal or harassment? Were they trying to harass in order to get individual to pay AGAIN because of desired impending home loan? When contacted, advised, “We can make it a minimal amount so you don’t have to deal with all the hassle of disputing it.”
I have a debt collector called Midland Funding LLC, also called Midland Credit Management, taking me into court for a bad debt on a credit card. The Credit card company, sold it to a different collection company in 2007. Now it got sold to the company I mentioned. Midland Funding and Midland Credit are being taken into court, because they have lied to customers, which I am one. and were caught. The Credit Card Company, says they have nothing to do with the bad debt, they have sold it.
A collection agency can pull your credit report, they can use this as a means to obtain up to date address information on you or to locate possible assets for law suits.
Can a collection Agency obtain Judgement ( for less than $800. due them) without the defendant having an opportunity to be presented there?
Ali – They should have notified you of the suit by serving you a copy of the complaint (which is a notice you are being sued). If this never happened, you can file a motion to vacate the judgment. Here is the Vacating a Judgment link.