February 5, 2023

Volume XIII, Number 36

Error message

  • Warning: Undefined variable $settings in include_once() (line 135 of /var/www/html/docroot/sites/default/settings.php).
  • Warning: Trying to access array offset on value of type null in include_once() (line 135 of /var/www/html/docroot/sites/default/settings.php).

February 03, 2023

Subscribe to Latest Legal News and Analysis

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.

© Copyright 2023 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 139

About this Author

Jesse Taylor Associate  Columbus complex contract, franchise law, qui tam litigation

Jesse Taylor practices in state and federal court, with experience in complex contract and franchise law and qui tam litigation.

Prior to joining Squire Patton Boggs, he worked as a litigation associate in another top 20 international law firm. Previously, Jesse served as a law clerk to the Honorable Judith E. Levy, US District Court, Eastern District of Michigan, and to the Honorable James G. Carr, US District Court, Northern District of Ohio. In addition to his law firm experience and clerkships, Jesse worked as the online communications director for the Office of the...