The Purpose-Driven Pull: The Northern District of Illinois Reaffirms Debt Collection As A Permissible Purpose Under The FCRA

In Stewart v. Credit Control, LLC, 2020 U.S. Dist. LEXIS 81332, the Northern District of Illinois dismissed a pro se claim against a debt collector.  The plaintiff claimed that the debt collector, who pulled the plaintiff’s credit information to facilitate collection of a debt, lacked a “permissible purpose” for obtaining his information.

In addressing the defendant’s motion to dismiss, the court noted an inescapable truth of the Fair Credit Reporting Act: it is a complete defense to an FCRA claim if a party has a permissible purpose for obtaining a consumer’s credit report.  Plaintiff readily admitted that the defendant was a debt collector, but argued that the only permissible purpose for obtaining his information was to offer him credit.  However, the court held, in accordance with multiple other courts, that debt collection is a permissible purpose for obtaining a consumer’s information under the FCRA, and rejected this argument.

Plaintiff also argued that the debt collector’s use of a “soft pull” to obtain his information, which would not show up on his credit report should another third party seek his information, was not included in the definition of “permissible purpose” under the FCRA.  The court again disposed of this argument, as “permissible purpose” means exactly that—a purpose that’s permissible, regardless of the method.

Plaintiff’s claims against various furnishers and a credit reporting agency are still pending, and we’ll keep an eye on this as it develops.

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