Re: Permissible Purpose Discussion--Section 604
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Posted by Dave (67.4.144.77) on December 13, 2002 at 21:49:11:
In Reply to: Re: Permissible Purpose Discussion--Section 604 posted by Christina on December 13, 2002 at 20:54:17:
Glad that you are interested in the topic of PP, and thanks for clearing up the LL shorthand. :) Here is a post that I posted on another board. Apparently they did not want to discuss the other side's best argument, instead accusing me of being a "spy" for a CA. LOL, I am a consumer..just trying to understand the FCRA. Here is the post: The FTC Statements of General Policy contains various statements that suggest that Congress intended not to limit permissible purpose to collection of credit accounts. At least one federal case holds the same, and the case has not been overturned. Even so, there is a portion of the FTC Statements of General Policy that would lead one to believe that a "credit account" is a requirement for permissible purpose to exist. (Note the very last sentence of the first excerpt below, "credit account") The discussion of Section 604 in the FTC Statements of General Policy state the following in part: The title of the paragraph is "Reports Sought in Connection with the 'Review or Collection of an Account' " (leads me to believe that the credit acct is not a requirement) "A collection agency has a permissible purpose under this section to receive a consumer report on a consumer for use in attempting to collect that consumer's debt, regardless of whether that debt is assigned or referred for collection. Similarly, a detective agency or private investigator, attempting to collect a debt owed by the consumer, would have a permissible pupose to obtain a consumer report on that individual for use in collecting that debt. An attorney may obtain a consumer report under this section on a consumer for use in connection with a decision whether to sue that individual to collect a credit account." 16 C.F.R. Pt. 600 App. My interpretation is that a credit account is only a requirement for PP when an atty is obtaining it for purposes of deciding whether or not to sue. A collection agency can obtain a consumer report in order to collect a consumer's debt, regardless of whether it is a credit account or not. The FTC could easily have stuck in the words "to collect a credit account" in their discussion of when a CA has a permissible purpose, but they chose not to, presumably intentionally. The next topic is entitled "Judgment Creditors" and it reads as follows: "A judgment creditor has a permissible purpose to receive a consumer report on the judgment debtor for use in connection with collection of the judgment debt, because it is in the same position as any creditor attempting to collect a debt from a consumer who is the subject of a consumer report." 16 C.F.R. Pt. 600 App. It sounds like a judgment creditor has a permissible purpose for obtaining a consumer report, whether or not the judgment was obtained from a suit involving a delinquent credit account. In Korotki v. Attorney Services Corp., Inc., the Maryland Federal Court held that a permissible purpose existed for an attorney to obtain a credit report for the sole purpose of determining the address of Korotki. The subject of the debt does not appear to involve a credit account, and the court does not even discuss whether or not the debt was a "credit" debt. IMO, this would have been a good argument for the plaintiff. 931 F.Supp 1269 at 1276-1277 ("The only purpose which the record reflects that defendants had was to obtain an alternate address at which to serve Korotki. In this Court's view, that purpose is permissible under 15 U.S.C. § 1681b(3)(E); accordingly, defendants did not violate the FCRA.")
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