Consumer Law

A Towed Car Does Not Establish A Credit Relationship Under the Fair Credit Reporting Act

By Kemnitzer, Anderson, Barron, Ogilvie & Brewer

A towing company towed our client's car from the public streets because the registration had expired. The towing company sold the car for nothing. Then it assigned its claim for the towing charge to a collection company, Pacific Creditors. Pacific Creditors pulled our client, Maria Pinto's credit report. Apparently it was trying to determine if she had enough assets to satisfy a judgment. Assured by her credit report that she was sufficiently well-off, Pacific Creditors then began to telephone Ms. Pintos repeatedly. Its agents told her that if she did not pay the towing charge, it would ruin her good credit. Pacific Creditors knew she had good credit because it had viewed her credit report.

Andrew Ogilvie of our firm filed suit against Pacific Creditors, charging that it had violated the Fair Credit Reporting Act (FCRA) by pulling Ms. Pinto's credit report without a permissible purpose.

Today the Ninth Circuit Court of Appeals, in Pintos v. Pacific Creditors Ass'n, issued an opinion confirming that Pacific Creditors violated the FCRA by obtaining Ms. Pinto's credit report without any Fair Credit Reporting Act-sanctioned purpose.

The FCRA only allows credit reports to be pulled ?in connection with a credit transaction involving the consumer . . . and involving the . . . collection of an account of . . . the consumer.? Mr. Ogilvie did not believe that the mere fact of owning a car that was later towed constituted such a "credit transaction." The Ninth Circuit's opinion confirms that it is not a "credit transaction."

Full post as published by California Credit Law Blog on April 30, 2009 (boomark / email).