Collection Agency Agrees to $2.2 Million Settlement in FCRA Case

A collection agency has agreed to a $2.2 million settlement after it was accused of violating the Fair Credit Reporting Act by obtaining the credit report of an individual without a permissible purpose.

Attorneys representing the plaintiffs in the class-action suit will receive one-third of the settlement, or $733,333.33. The remaining funds will be distributed among the 14,918 class members who elect to participate in the settlement. They will be entitled to about $101 each if all members participate.

The defendant, AllianceOne Management Receivables Inc., was accused of violating the FCRA back in 2015 when it allegedly obtained a copy of the plaintiff’s credit report to collect on four unpaid parking tickets, which the plaintiff alleged is not a permissible purpose. Under the terms of the settlement, the defendant denied all claims and did not admit any wrongdoing.

During the course of the case, the defendant sought and was denied a motion to dismiss and sought a motion for summary judgment, which was granted in part and denied in part. The judge denied the motion to dismiss, ruling that only credit reports may only be obtained if the underlying debt was some form of credit transaction. Because this case involved parking tickets, which are not based on credit, there was no need for the defendant to obtain a credit report, the judge ruled.

Certification of the class included anyone whose credit report was obtained by the defendant for the purposed of collecting a debt arising from a vehicle parking violation in the United States.

A copy of the settlement agreement in the case of Rodriguez v. AllianceOne Management Receivables, Inc. can be accessed by clicking here.