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EDVA: Dish Network's credit inquiry could be FCRA violation.

Byline: Rebecca M. Lightle

A plaintiff who said he contacted Dish merely to comparison shop for TV plans sufficiently alleged a consumer-protection claim against the company, arising from an inquiry that appeared on his credit report that the company failed to have removed.

Background

Plaintiff Ross Miller obtained his Equifax credit report and noticed a credit inquiry from Defendant Dish Network. He asked Dish to remove the inquiry and, after an investigative process, Dish said it would send a removal request to Equifax.

About six months later, Miller again obtained his Equifax credit report, and the Dish Network inquiry was still there. Miller then requested that Equifax remove the inquiry, but Equifax responded generically and did not remove the item. Miller then asked Dish to remove the inquiry and pay for violations of the Fair Credit Reporting Act. When it did not comply, he filed this lawsuit.

Miller claims that Dish Network had no permissible purpose for obtaining his credit report. He says he was simply shopping and comparing rates and plans. In doing so, he specifically demanded that Dish NOT pull his credit reports. He says that Dish's credit inquiry lowered his credit score and incorrectly signals to other creditors that he is seeking credit. He has also expended time and money to address the problem and has suffered increased blood pressure and a diabetic flare-up during those efforts.

Permissible purpose

Dish Network's motion to dismiss Miller's 15 U.S.C. 1681b(f) claim will be denied. The elements of a claim under subsection (f) include: (1) a consumer report; (2) obtained or used by the defendant; (3) without a permissible purpose as defined by statute; and (4) the defendant acted with the specified mental state.

Contrary to Dish's argument, Miller has alleged that it had no permissible purpose to obtain his credit report. The court agrees with Dish's contention that it need only have a "reasonable belief" that it had a permissible purpose for obtaining the credit report. The clear weight of authority, including persuasive authority from the 4th Circuit, supports this approach. However, Dish does not persuade in its argument that Miller's allegations affirmatively show the company's reasonable belief that it had a permissible purpose.

Because Miller's allegations eliminate all of the statutory "permissible purposes" except those for credit transactions and business transactions initiated by the consumer, those purposes are the only ones at issue.

Credit-transaction purpose. Dish Network clearly could not have had a reasonable belief that it intended to use the credit report for "review or collection of an account" for Miller, because Miller has alleged that the parties never had an account. Thus, all that remains to determine is whether Dish had a reason to believe it intended to use the information in connection with a credit transaction involving Miller and involving extension of credit to him.

A permissible purpose under subsection (a)(3)(A) cannot be established where the defendant obtained a credit report in response to the consumer's mere comparison-shopping behavior. Here, Miller was "essentially window shopping." Dish didn't have a credit account with Miller and was not close to extending him credit. And Miller had not initiated a transaction or sought to create a debt; nor did he apply for credit or accumulate debt. Thus, Miller's interactions with Dish were clearly insufficient to support a permissible purpose under subsection (a)(3)(A). And nothing in the complaint suggests that he applied for or requested any services, much less proposed to pay for them on credit or with a check.

Further, based on Miller's allegations, Dish couldn't have had a reason to believe it intended to use Miller's credit report in connection with a credit transaction. Miller specifically alleges that Dish Network has a common practice of obtaining credit reports of consumers who merely ask about prices and products, which shows that Dish didn't obtain Miller's credit report with the reasonable belief that it intended to use the report for a credit-transaction purpose.

In sum, Miller has sufficiently alleged that Dish Network may not rely on

1681b(a)(3)(A) to defeat his claim at the motion-to-dismiss stage. Indeed, if Miller's allegations are not rebutted, they are sufficient to support a finding that, as a matter of law, Dish has no permissible purpose for accessing his credit report under that provision.

Consumer-initiated business purpose. Miller alleges that he made a general inquiry about Dish plans and rates, made clear he didn't want his consumer report to be accessed if a hard credit inquiry was required, didn't initiate a transaction, and never signed any agreement or agreed to any Dish services. Further, Miller alleges that it was not clear either to himself or to Dish that Miller was actually initiating the purchase of a specific product or that Dish had a legitimate business need for the consumer-report information.

Thus, consistent with Federal Trade Commission guidance followed in other cases, Dish had no permissible purpose under subsection (a)(3)(F)(i). And no allegations suggest that Dish could have had a reasonable belief that it had a permissible purpose: There was no factual ambiguity as to the interactions between Dish and Miller, and Dish allegedly made a general practice to obtain credit reports on people like Miller.

Miller has sufficiently alleged that Dish lacked a permissible purpose, or reasonable belief thereof, under 1681b(a)(3)(F)(i). If Dish cannot counter Miller's allegations, they permit a finding that, as a matter of law, the company had no permissible purpose under that provision.

Because Dish Network raises no argument that Miller has failed to satisfy the other elements of a claim under subsection (f), its motion to dismiss that claim will be denied.

Miller v. Dish Network LLC, Case No. 3:17cv432, Aug. 1, 2018. EDVA at Richmond (Payne). VLW No. 018-3-318, 51 pp.

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Title Annotation:US Eastern District Court for Virginia, Fair Credit Reporting Act
Author:Lightle, Rebecca M.
Publication:Virginia Lawyers Weekly
Date:Aug 17, 2018
Words:977
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