Court Rules for Collection Law Firm in FCRA Case

The U.S. District Court of Minnesota recently ruled that a debt collection law firm did not violate the Fair Credit Reporting Act (FCRA) when it obtained and used contact information from a debtor’s credit report that contained information on the identically-named plaintiff.

Sound confusing? Here’s what happened:

Collection law firm Rubin & Rothman, LLC had an account placed with it in 2008 for a Mary Miller residing in New York. The contact information was consistent with a New York residence, except for the phone number, which carried a Minnesota area code. When that number was called by the firm, a different Mary Miller answered and explained that she did not live in New York and that the Social Security number listed on the file was not hers. The phone number was removed from Rubin & Rothman’s files.

But over the course of the year, the law firm pulled debtor Mary Miller’s credit report three times looking for additional contact information, and each time the credit report contained mixed information including that of the Minnesota Mary Miller. When the firm again verified that some of the information was on the wrong person – and the real debtor could not be located – it ceased collection activities and sent the account to an attorney network.

A judgment with garnishment was subsequently entered against the Minnesota Mary Miller, but since Rubin & Rothman were not involved, that is not the central allegation of the suit. Mary Miller sued the firm on the basis that it did not have permissible purpose to obtain and use her information from a credit report.

The court rejected that argument, noting that the firm had no reason to believe the contact information in the credit reports were unreliable, writing:

“In this circumstance, Defendant had a reason to believe that pulling the consumer reports in question would aid it in its debt collection efforts in relation to the Accounts. Accordingly, Defendant had a permissible purpose every time it obtained the consumer reports. Although the consumer reports contained some of Plaintiff’s information, Defendant was not in control of the information which was disseminated to it, rather it used only Debtor Mary Miller’s information to request a consumer report in order to aid in its efforts to collect the debt owed by Debtor Mary Miller. Any information obtained about Plaintiff was obtained passively, not actively.”

The plaintiff’s motion for summary judgment was denied while the defendant’s motion for summary judgment was granted.

Rubin & Rothman was represented by James R. Bedell and Michael S. Poncin of Moss & Barnett, PA, while the plaintiff was represented by Trista M. Roy and Thomas J. Lyons, Consumer Justice Center, PA. (Note: Thomas R. Lyons, Jr. of the Consumer Justice Center, and assumptive relation to the plaintiff’s counsel, was suspended from practicing law in Minnesota last year.)