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Tag: Impermissible Pull

Mistaken ID FDCPA Claim Survives Summary Judgment

Steven Uhrich

Link 1: (SHA Opinion) Ali v. Portfolio Recovery Associates, LLC, Case No. 15-cv-06178 (N.D. Ill. Sept. 30, 2018);
Link 2: (SAA Opinion) Ali v. Portfolio Recovery Associates, LLC, Case No. 15-cv-06178 (N.D. Ill. Sept. 30, 2018).

These two consolidated cases derive from PRA’s attempt to collect different debts from the wrong Syed H. Ali and from his father Syed A. Ali. The suit alleges that PRA unsuccessfully sought to collect a debt from a person named SHA located in Texas, and then went after a different SHA—one of the plaintiffs here. PRA sent collection letters and then filed a lawsuit through the defendant attorneys. The underlying error here is defendants sought collection against the Debtor and served the collections complaint at an address where another person bearing the same name (including middle initial) lived.

Plaintiff, represented by  Bryan Thompson and Robert Harrer of the Chicago Consumer Law Center, P.C., Daniel Brown, of Main Street Attorney, LLC, Blaise & Nitschke, P.C. & The Law Office of M. Kris Kasalo, Ltd., filed a 9-count complaint.

Opinion 1

The court (Judge Sharon Johnson Coleman) issued two opinions: one for the minor SHA and one for the father SAA. As to SHA, the court found that factual issues abound as to whether this was a consumer debt (thus falling within the FDCPA) and also regarding the Bona Fide Error defense that Defendants asserted. However the court granted summary judgment as to the 1692d and 1692f claims finding that there wasn’t harassing or unfair or unconscionable means used in the attempted debt collections.

The claim under the Illinois Collection Agency Act (“ICAA”), 225 ILCS 425/1 et seq. failed because the court found that the ICAA did not intend to give consumers a private right of action and dismissed it sua sponte under Rule 12(h)(3):

SHA cites Sherman as authority for his implied right of private action. Sherman v. Field Clinic, 74 Ill. App. 3d 21, 392 N.E. 2d 154 (1st Dist. 1979). Since Sherman was decided nearly 40 years ago this district and even Illinois state courts have been split on whether to follow it . . .  If the legislature intended for there to be an implied right of action, it would have written it into the law itself, especially considering the lapse in time since Sherman was decided, implying this right.

Opinion 2

The second (SAA) opinion  addressed additional claims by SAA against Blitt & Gaines, P.C. and Freedman Anselmo Lindberg Oliver, LLC (which have since merged). The additional counts were brought under the Fair Credit Reporting Act and Fair Debt Collection Practices Act. The court dismissed the 1692d claim on the basis that there was no evidence that the collection attorneys knew they had they wrong man, but allwed the 1692e claim against PRA to survive despite the Bona Fide Error defense:

The Section 1692e FDCPA violations against Portfolio stem from its alleged failure to confirm the account Debtor’s personal information and recognize that it differed from SAA’s information before pursuing collections and the lawsuit. This Court finds that there is a question of fact whether a reasonable, unsophisticated consumer would be misled by Portfolio’s actions. SAA was upset and confused by the letters and the lawsuit against “Syed Ali.” Indeed, mistakenly being sent a demand letter or being served with a lawsuit in one’s name, taken in isolation, could be confusing[. . .]

This Court [. . .] finds an issue of fact as to the sufficiency of Portfolio’s controls and procedures since Portfolio was on notice from the August 29, 2014 TransUnion report, prior to its filing of the lawsuit against Syed Ali, that another Syed Ali lived at the address associated with the Debtor.

The court granted summary judgment in favor of the debt collector attorneys based on their bona fide error defense, noting that they don’t have to apply “most comprehensive approach to avoid errors. Courts have found it sufficient for defendants to take reasonable efforts to avoid violations if FDCPA.”

As to the impermissible pull claim under the FCRA, the court sided with PRA in that the CRA was the entity responsible for the pull on the incorrect address and the subsequent pulls were related to accounts that the correct SAA had with Portfolio.

 

Summary Judgment Awarded Against Comcast for Impermissible Pull Claim

Steven Uhrich

Link: Santangelo v. Comcast Corporation, Case No. 15-cv-0293 (N.D. Ill., Sept. 17, 2018).

Plaintiff, represented by Keith Keogh of Keogh Law, Ltd., sued Comcast under the Fair Credit Reporting Act and the Illinois Consumer Fraud Act alleging they impermissibly pulled a credit check on him despite the fact he paid a $50 deposit to forgo a credit check when applying for internet services. As a result, his credit score dropped by six points. Comcast refunded Plaintiff the money he paid with interest and caused the hard pull to be masked. The parties filed cross motions for summary judgment which were both granted and denied in part.

FCRA Claim

Comcast argued that Plaintiff’s lowered credit score could not satisfy Article III’s injury-in-fact requirement with respect to his FCRA claim, because he has not shown that he was denied a loan, a purchase, or a credit application. Judge John Z. Lee disagreed, citing Evans v. Portfolio Recovery Assocs., LLC, 889 F.3d 337, 344-46 (7th Cir. 2018) for the proposition that “it is ‘very easy’ to envision a lowered credit score creating a real risk of financial or other harm that satisfies the injury-in-fact requirement.” The court also rejected the challenge to causation since the score dropped the same day as Comcast’s pull and that the case was not moot due to the refund or subsequent masking.

As to the merits, the parties disputed whether Comcast had a “legitimate business need” under § 1681b(a)(3)(F)(i), and the court found in favor of Plaintff:

There is no dispute that Comcast offered to provide Santangelo internet service without obtaining his TELCO information, if he paid a $50 deposit. And no reasonable jury could conclude that Comcast needed Santangelo’s credit score to determine his eligibility for service when Comcast’s own policies and representations to Santangelo indicated otherwise.

The court also ruled in favor of Plaintiff in regards to Comcast’s argument that Plaintiff agreed to the credit pull under § 1681b(a)(2), finding that it’s a strained argument and that Comcast failed to develop the record to support it. So liability as to the the FCRA claim was decided in favor of Plaintiff.

Whether Comcast violated the FCRA willingly or negligently (and thus whether Plaintiff may be awarded punitive damages or not) under § 1681n will be a fact for the jury:

There is evidence in the record from which a jury could reasonably conclude that the Comcast representative who initiated the credit check did so in error. But, there is other evidence from which a reasonable jury could conclude that Comcast knew or should have known that it would likely happen based upon prior experiences with similar incidents.

State Law Claims

The court found that as to the state law claims under the Illinois Consumer Fraud Act, breach of contract, and unjust enrichment, Plaintiff failed to adduce sufficient evidence of actual damages. As a result Comcast was awarded summary judgment on those counts. The court noted, however, that for purposes of Article III standing analysis, “actual damages and injury in fact ‘are not the same thing.’ Abbott v. Lockheed Martin Corp., 725 F.3d 803, 808 (7th Cir. 2013).”