Saturday, December 19, 2009

Experian loses ruling that could strengthen Fair Credit Reporting Act


The U.S. 9th Circuit Court of Appeals rules in favor of a woman who had been pursued by a collection agency that used an Experian credit report to try to recover a towing fee owed by her son.

For seven years, a bill collector enabled by the powerful Experian credit reporting bureau pursued Maria Pintos over a $3,000 towing bill.

"They used to call me at work and threaten to ruin my good credit," Pintos, 71, said of Pacific Creditors agents who hounded her at her San Mateo County mental health department job for months after the May 2002 towing. "It was so embarrassing, because there were patients around who could hear."

On Thursday, the 71-year-old Pacifica, Calif., woman beat the firms in federal appeals court, winning a ruling that could have wider implications for the credit industry.

A divided three-judge panel of the U.S. 9th Circuit Court of Appeals ruled that Pacific Creditors Assn. and Experian Information Systems Inc. violated Pintos' privacy, as well as the Fair Credit Reporting Act.

Pintos had bought a sport utility vehicle for her son, turning over the title to him after he paid her back.

Based on a review of her Experian credit report, Pacific Creditors tried to collect on behalf of a towing business that had towed and impounded the vehicle. The collection agency had pegged Pintos a better bet for paying the bill than her son, who had financial problems and poor credit.

The appeals panel ruled that the agency had no right to request, nor Experian to provide, Pintos' credit report, because she had never initiated a credit application or failed to pay a debt willingly assumed.

Experian spokeswoman Roslyn Whitehurst said it was "corporate policy not to comment on anything pertaining to pending litigation."

The California Department of Consumer Affairs was reviewing the ruling and still assessing its implications for consumers, said spokesman Luis Farias.

The decision could lead to the two firms' paying damages to Pintos. It could also serve as a warning to the credit industry to adhere to the specific conditions outlined in the Fair Credit Reporting Act for buying and selling consumer credit histories.

"This is a very important case for victims of identity theft because credit reporting agencies have been arguing for years that they can give your credit report to anyone they think is reliable," said Andrew J. Ogilvie, the San Francisco attorney to whom Pintos was referred when she appealed for help from the San Mateo legal aid services for seniors.

The 9th Circuit ruling could lead to broader adherence to the Fair Credit Reporting Act, which firms routinely violate without consequences because of the expense of litigation and poor prospects of winning monetary compensation, Ogilvie said.

Barring appeal by the credit agencies, the case will go to trial in federal court on whether Pintos is due compensation for emotional suffering and lost wages.

They can also point to the dissent of one of the three judges, Carlos T. Bea, who argued that Pintos did trigger the agencies' sharing of her credit history by her decision to leave the vehicle on a public street "where she knew it might be towed."

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