INVASION OF FINANCIAL PRIVACY

What is “Invasion of Financial Privacy”?

What can I expect from a lawsuit involving an impermissible pull?

Robert F. Brennan, Esq.

Q. What is “Invasion of Financial Privacy”?

A: Invasion of Financial Privacy is also referred to as "Impermissible Access" or "Impermissible Pulls" of your private credit report. For a creditor or potential creditor to "pull", or access, your credit report, it would need a permissible, or proper, purpose. Common permissible purposes include when a consumer has applied for credit or has applied to buy something, such as a car, a home mortgage or a major appliance. Potential creditors can also access your credit report in connection with a “firm offer of credit,” that is, when the creditor definitely plans to offer you some form of credit.

However, there are limits on when creditors can pull a consumer's credit report.

"Impermissible access" occurs when a creditor pulls a consumer's credit report without the consumer's permission and without a permissible purpose. Sometimes, for instance, creditors will pull a consumer's credit report long before the consumer initiates a credit transaction, such as when a store or a car dealership would pull a consumer's credit report to see if they would quality to buy something at a certain price, even though the consumer has not even expressed an interest in the purchase. Insurance companies sometimes pull credit reports on plaintiffs in personal injury or worker's compensation claims, because if the plaintiff is strapped financially, he or she will usually settle sooner and for less money.

Sometimes creditors or potential creditors pull a consumer’s credit report repeatedly, when one such access will provide the creditor with any necessary information it might need. Multiple pulls of a consumer’s credit report can depress the consumer’s credit score, so this type of activity is definitely not proper.

Sometimes creditors continue to pull a consumer’s credit report after the consumer has discharged the creditor’s debt in bankruptcy. Since this can lower the consumer’s credit score, this makes it all the more difficult for the consumer to recover his creditworthiness.

There are many forms of impermissible access, but the common denominator is that the creditor pulled the credit report without the consumer's permission and without any permissible purpose. These types of lawsuits are always brought against the creditor who performs the impermissible pulling.

Q. What can I expect from a lawsuit involving an impermissible pull?

In California, there is a statutory penalty of $2500.00 per violation for impermissible access to a consumer's credit report. In certain situations, the consumer can also receive his or her actual damages, if he or she can prove them, as well as mental anguish damages and punitive damages. The successful consumer will also have his or her attorney's fees paid by the defendant.