District Court Rules Law Firm Debt Collection Did Not Violate Fair Credit Reporting Act
On September 19, 2011, the U.S. District Court of Minnesota held that a law firm did not violate the Fair Credit Reporting Act (FCRA) when it obtained and used a plaintiff’s personal information contained in the credit report of the actual debtor while engaging in debt collection. The court concluded that the firm had a reason to believe that use of the plaintiff’s information would aid in the collection of the debt owed by the actual debtor.
In this case, a law firm engaging in debt collection activity placed three electronic requests with a credit reporting agency for a credit report of a debtor. The first request was intended to acquire a new telephone number for the debtor, the second to ascertain the debtor’s sources of income, and the third to find the debtor’s new address because a summons and complaint sent to the debtor’s New York address was returned unexecuted.
Every time the defendant pulled the debtor’s credit report, it contained mixed information, including the address, social security number, and former employers of the non-debtor plaintiff (who did not owe the debt but had the same first and last name as the debtor). Using the plaintiff’s Minnesota address in the third report, the firm sent a registered letter to the post office and confirmed that a person with the same name as the debtor received her mail there. The plaintiff asserted that defendant violated the FCRA by obtaining and using her credit information without having a permissible purpose.
The plaintiff contended that the credit information in the pulled credit report was obviously mixed, and that the defendant should have known that it was not obtaining information exclusively on the debtor, but rather on the plaintiff as well, for which defendant did not have a permissible purpose.
The court rejected the plaintiff’s argument, finding that each time the law firm pulled the credit report, it had a reason to believe that this would aid in its debt collection efforts against the debtor. Although the credit reports contained some of the plaintiff’s information, the law firm did not violate the FCRA because it never sought to obtain this information but passively received it.
The court also rejected the plaintiff’s argument that even if the law firm had a permissible purpose in obtaining the consumer report in question, it did not have a permissible purpose to use the personal information of the plaintiff, namely her address. The court found that, on the facts of the case, the debt collector had reason to believe that use of the Minnesota address would aid in the effort to collect from the debtor because the summons and complaint sent to the debtor’s previous address was returned unexecuted and the defendant had verified that a person with the debtor’s first and last name lived at the Minnesota address. Accordingly, the law firm’s receipt and use of the plaintiff’s address contained in the consumer report did not violate the FCRA.
A copy of the court’s opinion is attached here. Miller v. Rubin & Rothman, LLC, No. 10-2198, 2011 U.S. Dist. LEXIS 106246 (D. Minn. Sept. 19, 2011) (Davies, J.).
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