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Court Finds Permissible Purpose Under FCRA, Despite Alleged Lack Of Consent

The Eastern District of Wisconsin recently confirmed that the permissible purpose for obtaining a consumer credit report under FCRA is broad. In Long v. Bergstrom Victory Lane, 2018 U.S. Dist. LEXIS 171750 (E. D. Wisc. October 4, 2018), the plaintiff brought FCRA and other claims after an auto dealer submitted her credit application and report in connection with financing for a vehicle. The plaintiff told the dealer that it could only run her credit with one company and no other entity. The auto dealer allegedly agreed. Later, however, the plaintiff learned that the auto dealer had in fact submitted her credit application and report to multiple other entities. Plaintiff claimed that the auto dealer acted with intentional disregard to the authority she gave, causing her emotional distress.

Plaintiff sued the auto dealer, arguing that defendant acted with an “impermissible purpose” when it obtained her credit report. Conversely, the auto dealer argued that it acted with an a permissible purpose under FCRA to procure financing for the plaintiff.

The Court agreed with the auto dealer, and dismissed plaintiff’s complaint. Specifically, FCRA provides that a consumer report can be provided when a person “intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to . . . the consumer.” 15 U.S.C. § 1681b(a)(3)(A). Accordingly, the auto dealer acted with a statutorily defined permissible purpose when it used plaintiff’s credit report to obtain financing for the plaintiff.

The fact that the auto dealer allegedly submitted plaintiff’s credit application to a number of financial institutions did not negate the auto dealer’s underlying permissible purpose. The Court explained that “[u]nder the FRCA, a business does not require the consent of the potential customer, so long as it has a statutorily defined ‘permissible purpose.’” Long, 2018 U.S. Dist. LEXIS 171750, at *5. Accordingly, the Court found that the auto dealer acted with a permissible purpose, even though plaintiff claimed that she did not consent to the manner in which the auto dealer used her credit application.

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