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Pulling report without permission?


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If you have an account that has been closed for nearly two years, is the original creditor still allowed to make inquiries on it? What about if you have disputed the account?

There is case law that says that, in the event of a dispute, a creditor MAY have permission to pull your credit. In the event it's closed and there is no dispute, there's not necessarily no permissible purpose. There was a recent case against EX and WFNNB on this (Levine v. WFNNB).

There is a difference in opinion on whether the ambiguous language in FCRA contains an absolute prohibition against the sale of credit reports to former creditors whose accounts are closed and paid in full. Compare Wilting v. Progressive County Mut. Ins. Co., 227 F.3d 474, 476 (5th Cir.2000) (per curiam) ("[N]either [FCRA] nor the FTC's commentary on [FCRA] suggests that a report may only be permissibly obtained during particular points in the parties' relationship."), with Letter from Clarke W. Brinckerhoff, Federal Trade Commission, to Kenneth J. Benner, American Council on Consumer Awareness (Aug. 30, 1999) ("Once an account is closed because the consumer has paid the debt in full . . . it is our view that no permissible purpose exists for a [consumer reporting agency] to provide file information . . . to the creditor. Because there no longer exists any account to `review' and the consumer is not applying for credit, the FCRA provides no permissible purpose for the creditor to receive a consumer report from [the agency]."). Citing 15 U.S.C. § 1681s-2(a)(2), Experian argues that a former creditor has a duty under FCRA to provide accurate information to the consumer reporting agency and that a request for a credit report is a permissible way to comply with this duty. Zeller v. Samia, 758 F.Supp. 775, 781 (D.Mass.1991) (creditor permissibly obtained plaintiff's consumer credit report as part of effort to verify that information had been correctly recorded). On the other hand, Levine argues that the duty to report accurate information is not coextensive with the creditor's right to purchase a credit report and that there are lawful and less invasive methods to confirm that proper credit information has been reported to the agency. He contends that § 1681b(a)(3)(A) should apply either when an account is being created or has gone into collection and that § 1681b(a)(3)(F)(ii) should apply when the account is open and active. Otherwise, Levine argues, § 1681b(a)(3)(F)(ii) becomes superfluous.

In the absence of discovery and a more fully developed record, we reserve judgment on whether there is an absolute prohibition against such requests by former creditors for accounts that are closed and paid in full. However, such a decision is not necessary to determine whether Levine presents a colorable claim against Experian. Levine alleges that his report was twice requested within the span of a few months despite his account being closed for years with an undisputed zero balance. A simple recitation of "account review" by a former creditor does not automatically absolve Experian of its duty to protect confidential information when there are reasonable indications that the request was for other purposes. In light of the legislative findings in FCRA and considering the standard of review, we conclude that the question of whether Experian had "reasonable grounds" to believe that Structure intended to use Levine's consumer report for an impermissible purpose, or whether Experian made "reasonable efforts" to verify the validity of Structure's request, is a fact intensive one that is not resolved by the pleadings. The question of whether this noncompliance, if it exists at all, results from willful defiance or negligence is also not resolved by the pleadings.

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