Finance House

In Oct 2003 I financed a car with XYZ Company. They pulled my CRA file - no problem, it's permissible.

BUT... they also pulled it in April, July and November 2004 (soft pulls all 3). I send them a letter in December 2004 demanding to know ther PP and demanding $3000 if they had none. Today I get the following response:


Dear Flyingifr:

I am an attorney with XYX Company and I have been asked to review your letter and respond. I understand that XYZ Company may have pulled your credit report on one or more than one occasion and that you are complaining that this is a violation of the fair Credit Reporting Act. I have investigated your concerns and it appears that XYZ Company may have in fact pulled your credit but those actions of XYZ Company are permissible under Fair Credit Reporting Act. From what I can tell, subsidiary companies of XYZ Company looked at your credit for marketing purposes. When a subsidiary of the principal company pulls the report in the manner in which they did other lenders do not see those inquiries. These inquiries are referred to as "soft inquiries" rather than "hard inquiries" that go on your permanent record. Only you as a consumer can see when a soft inquiry is made.

Based on the foregoing, XYZ Company has decided against settling this claim for $3,000.00 or any other amount.


Obviously I know they were soft inquiries.

Here's my response:


Re: Flyingifr v. XYZ Company

Dear Mr. Attorney:

I am in receipt of your letter dated January 26, 2005 and I completely disagree with your conclusion that XYZ had any permissible purpose to pull my credit file in the months of May, July and November of 2004.

I believe there are two different laws involved here and your position may be a confusion over the application of them. The first is Fair Credit Reporting Act (FCRA)and the other is the Gramm-Leach-Bliley Privacy Act (GLB).

Your subsidiary companies, if your company Privacy Policy pursuant to GLB so states, (and I have not been apprised of this policy, which is a violation of GLB all by itself), may solicit XYZ Company customers. That point is undisputed. What is disputed is whether they may pull that customers credit file, in either a hard or a soft pull, at all. It is my position that GLB does not give any Permissible Purpose under FCRA.

The fact is that FCRA itself, in its plain language, states unequivocally that any consumer reporting agency may furnish a consumer report under the following circumstances and no other (15 USC 1681b(a))(emphasis mine). Therefore, GLB cannot grant Permissible Purpose, only FCRA can.

FCRA goes on to list several Permissible Purposes (please remember, the clause and no other makes this list exhaustive). I demand that you cite, by section of United States Code, under which section of law XYZ Company, or any of its subsidiaries or affiliates, claims Permissible Purpose to look in my credit file. For your convenience, I have attached a copy of 15 USC 1681b as amended by FACTA in its entirety. In addition, I have also attached the appropriate pages of the Consumer Credit Law Manual, authored by the national Consumer Law Center and published by Matthew Bender. You will please note Section 16.04 deals with the issue at hand. Nowhere has the issue of a creditor giving its customer list to subsidiaries (possibly permissible under GLB for marketing purposes), and then the subsidiaries deliberately pulling a consumer report that is not a pre-screened list (15 USC 1681c). In other words, my position is that your subsidiaries or affiliates can either market to your customers without pulling a credit report -and/or- submit a list of credit criteria to a credit reporting agency who will then do a search of its files for consumers who meet that set of criteria, subject to the opt-out provisions of FCRA and then your subsidiary must make a firm offer of credit or insurance to each customer on the list.(15 USC 168b(c)). You cannot hand your customer list over to your subsidiaries who then pull your customers credit reports then decide if they wish to make a firm offer.

I would also like to point out that I have elected to be excluded from solicitations, or PRM pulls as they are called by the credit reporting agencies, so the pulls of my credit file were not performed as a result of any act described in Section 1681(c). They were the conscious and deliberate act of invading my privacy and violating my rights under law.

It is my position that the actions of XYZ Company, its affiliates and subsidiaries are a deliberate and willful act.

I will advance my calendar to March 1, 2005. If XYZ Company still chooses not to settle this matter with me I will retain Counsel and file suit in Federal District Court without any further notice. In the mean time I will be checking with the other Credit Reporting Agencies to see if unauthorized pulls were made with them. The $3,000.00 claim could escalate to $9,000.00 ($3,000.00 for each of three unauthorized pulls at each of three separate Credit Reporting Agencies).


OK, any takers on where to go from here? From where I can see, this is totally uncharted territory and I can find no precedent or cases to guide me either way.

If these were truly pulled by subsidiary companies for marketting purposes, as he says, they would have been OK if PRMs thru the usual CRA channels, but not if full reports whether soft ARs or not. "Marketting" is not a permissible purpose under FCRA, except within the more limited promotional report. Were the coded as PRMs or not? If they were PRMs, the company is off the hook, even if you have opted out. The CRA is the one that screwed up.

It doesn't sound like this attorney is very familiar with FCRA, since he would probably be safer claiming this was an account review on your loan, than claiming it was for marketting by a subsidiary, which if it was not a PRM, is practically an admission of no PP. Either that or he thinks he can snow a naive consumer.

Presumably this is a closed end loan, with terms set when signed. It is not a "revolving account", where the lender can decide to increase or reduce your credit line. Was your loan maintained in good standing, with no collection purpose to pull a report? Did you obtain your insurance thru the lender or one of their subsidiaries, which might give them the right to pull for insurance reasons?

What does your loan contract say about pulling credit reports? Does the contract claim they can pull reports later? (Although they might claim such language would give them the right to pull, regardless of FCRA, you would argue that federal rights are not waivable.)

Originally posted by ontrack
If these were truly pulled by subsidiary companies for marketting purposes, as he says, they would have been OK if PRMs thru the usual CRA channels, but not if full reports whether soft ARs or not. "Marketting" is not a permissible purpose under FCRA, except within the more limited promotional report. Were the coded as PRMs or not? If they were PRMs, the company is off the hook, even if you have opted out. The CRA is the one that screwed up.

TU doesn't indicate whether they are PRM's or not, but they have already admitted they just gave their customer list to their subsidiary who pulled first and then decided whether to offer credit or not after the pull. The CRA was not involved at all.

It doesn't sound like this attorney is very familiar with FCRA, since he would probably be safer claiming this was an account review on your loan, than claiming it was for marketting by a subsidiary, which if it was not a PRM, is practically an admission of no PP. Either that or he thinks he can snow a naive consumer.

Nope, an AR wouldn't fly either - it's a fixed obligation loan and the Gowen letter specifically states it's not PP. I think he thinks he can snow a naive consumer, and is HE in for a shock. AFTER they settle with me (or even better, lose to me in Court) my wife will be suing them over EXACTLY the same thing (they did it to her, too) only HERS will be a Class Action.

Presumably this is a closed end loan, with terms set when signed. It is not a "revolving account", where the lender can decide to increase or reduce your credit line. Was your loan maintained in good standing, with no collection purpose to pull a report? Did you obtain your insurance thru the lender or one of their subsidiaries, which might give them the right to pull for insurance reasons?

The next loan payment is due March 2006. I have paid 2 payments a month, every month. Never delinquent. It is a fixed rate obligation. I have my own insurance, no forced-placed insurance. I guess they are runing out of safe harbors.

What does your loan contract say about pulling credit reports? Does the contract claim they can pull reports later? (Although they might claim such language would give them the right to pull, regardless of FCRA, you would argue that federal rights are not waivable.)

The loan contract is silent on the subject, and my position is no mention is no permission.

You only have the rights you are willing to defend.

Wow, flying. First I must say that I thought you were female all this time. :blush:

Secondly, I think you have done your research. That letter sounds great and would scare me, if I didn't know some of that stuff. I wish you luck and hope you get that 3K.