• Plaintiff's Permissible Purpose Claim Survives Motion to Dismiss
  • September 30, 2009 | Author: Marc Kirkland
  • Law Firm: Strasburger & Price, LLP - Frisco Office
  • Cappetta v. GC Servs L. P.,  2009 U.S. Dist. LEXIS 80619 (E.D. Va. Sep. 4, 2009)

    Facts: Plaintiff alleged that Defendant collection agency violated § 1681b of the Fair Credit Reporting Act (“FCRA”) by obtaining her consumer report without a permissible purpose and violated the Fair Debt Collection Practices Act (“FDCPA”) in its collection efforts. Plaintiff’s claims arose out of Defendant’s efforts to collect debt from an American Express credit card account which her estranged husband opened and she was an authorized user. During its collection efforts, Defendant’s representatives told Plaintiff that her social security number and signature were on the credit card application, but neither statement was true. As part of its collection efforts, Defendant contacted Experian Information Solutions, Inc. and requested a copy of Plaintiff’s consumer report because it represented that it was collecting on an account resulting from Plaintiff’s credit transaction. Defendant moved to dismiss Plaintiff’s claims and the Court denied the motion.

    Permissible Purpose. Section 1681b(a)(3)(A) provides that a consumer reporting agency (“CRA”) may provide a consumer report: “to a person which it (the CRA) has reason to believe 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, or review or collection of an account of, the consumer.”  Further the person who obtains the report shall not do so unless: (1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under §1681b; and (2) the purpose is certified in accordance with § 1681e by a prospective user of the report.

    Permissible Purpose.  In order to survive a motion to dismiss, a plaintiff must allege, with sufficient factual support, that a defendant willfully or negligently obtained her consumer report without a legitimate business purpose for doing so. Plaintiff satisfied her burden by alleging that at the time Defendant certified it had a permissible purpose to obtain Plaintiff’s consumer report, it knew that it was not in possession of any application on the account and that Plaintiff was only listed, at most, as a supplemental cardholder.

    FDCPA. Defendant’s assertion that the Voluntary Payment Doctrine (“Doctrine”) precluded any recovery of Plaintiff’s FDCPA claim was rejected by the Court.  The Doctrine, which is recognized by Virginia courts, holds that where a person with full knowledge of the facts voluntarily pays a demand unjustly made upon him, that party is not entitled to recover the money paid. The Court determined that it was exercising jurisdiction by virtue of a federal question, not diversity of citizenship, thus nothing obliged the Court to apply state substantive law. Moreover, the Defendant failed to present authority that Congress had incorporated the Doctrine as a defense to an FCDPA claim.