When Can Debt Collectors Access Your Credit Report

We hear many complaints from consumers concerned that a debt
collector Justice _scalehas gained access to their credit report. 
Given that the consumer originally dealt with a creditor, and did
not ever deal with the collector directly, they wonder why it is
that the collector can dig into your personal, private credit
report. 

Pursuant to the Fair Credit
Reporting Act
, only companies that have received an application
for, or entered into an agreement with the consumer for, the
providing of credit, insurance or employment may access the
consumer’s credit report.  However, debt collectors in many
instances pull the credit report instead of the creditor. 
This is because the debt collector, assigned the obligation of
collecting the debt, stands in the shoes of the creditor.  If
the creditor had the right to pull the credit report, then so does
the collector. 

However, what happens when the original creditor could not pull
the credit report?  When a person goes to a hospital or
doctor’s office, the medical facility is not extending credit,
employment or insurance.  The medical facility has no right to
access a consumer’s credit file to determine the ability to pay the
bill.   Therefore, the collector that is assigned to
collect on the account has no right to access the credit report of
the consumer.  The same holds true for collectors of parking
tickets, municipal fines, or back taxes.  If a collector that
is chasing one of those debt gains access to the consumer’s credit
report, there is likely a violation of the Fair Credit Reporting
Act. 

This brings up another issue.  The collector is allowed to
pull the credit report for a “legitimate business purpose” and that
phrase has been widely accepted to mean that the review of the
credit report is to determine the ability of the consumer to pay
the debt.  We have had calls from consumers in the past
complaining about the way in which the credit report was being
used.  While often times the collector would sit on the phone
with the consumer and point out the availability of room on a
credit card to make a payment, we hear complaints that the
collectors have gotten outright abusive.  Some have reported
that the collector used the opportunity to mock or harass the
consumer about their credit report – sort of picking on the
consumer for their economic shortcomings.  There have been
complaints that the collectors would sit and laugh at the consumer
over the phone and belittle them for their lack of credit and any
hope in the future.  Is this a legitimate business
purpose? 

We have had some success  in making the argument that the
credit report was not pulled for a legitimate business purpose, but
being pulled for the purpose of harassment and abuse. 
Obtaining access to a credit report for the purpose of harassment
and abuse is not a permissible purpose to access a consumer’s
credit report. 

Are collectors pulling your credit report?  Are you
concerned that this access to your private information is
unpermitted by law?   SmithMarco, P.C., has over 30 years
of combined experience practicing law protecting the rights of
consumers around the country.  Contact
us
for a free case review.