In a case that was defended by the team at Malone Frost Martin, a District Court judge in Indiana has granted a defendant’s motion for summary judgment after it was sued for allegedly violating the Fair Credit Reporting Act when it obtained a propensity to pay score for an individual from a credit reporting agency after the individual had filed for bankruptcy protection. In granting the defendant’s summary judgment motion, the judge denied a motion for summary judgment that had been filed by the plaintiff and determined that a motion for class certification was moot.
A copy of the ruling in the case of Persinger v. Southwest Credit Systems can be accessed by clicking here.
The plaintiff and her husband filed for bankruptcy protection. One of the debts that was discharged as a debt owed by the plaintiff’s husband, which was placed with the defendant for collection. The plaintiff did not have an account of her own with the defendant. The plaintiff has had five last names during her life, each of which was included in the discharge notice.
After the debt owed by the plaintiff’s husband had been discharged, another account was placed with the defendant. The name on that account matched one of the names on the plaintiff’s discharge notice — she had used that name for 10 years, but had stopped using it two years before she began using her current name.
Along with sending the account to a third-party vendor to see if the individual had filed for bankruptcy protection, the defendant sent the account to a credit reporting agency in order to obtain a propensity to pay score.
The plaintiff noted the inquiry on her credit report and filed suit, alleging the defendant did not have a permissible purpose to make such an inquiry.
The analysis conducted by Judge Richard Young of the District Court for the Southern District of Indiana, Indianapolis Division, took a hard look at the policies and procedures used by the defendant to check new accounts for bankruptcy filings and the timing of when a propensity to pay score is obtained.
“The evidence before the court demonstrates that Southwest reasonably relied on a procedure to minimize the risk of improperly accessing a consumer’s credit report,” Judge Young wrote in his ruling.
