MTD in Permissible Purpose FCRA Case Denied

A District Court judge in New Jersey has denied a defendant’s motion to dismiss after it was sued for violating the Fair Credit Reporting Act by obtaining the plaintiff’s credit report without a permissible purpose to do so.

A copy of the ruling in the case of Mathews v. Verizon Communications Inc. can be accessed by clicking here.

The plaintiff noticed during a review of his credit report that the defendant had performed a credit inquiry on him even though the plaintiff was not a current or prospective customer of the defendant. The plaintiff subsequently received a letter from the defendant, notifying him that an account had been opened in his name. The defendant then sent the plaintiff another letter, this time informing him that he was not responsible for any of the charges associated with the account. The letter also said the defendant would ask the credit bureaus to remove the item from the plaintiff’s credit report.

A year later, the same series of events occurred, except this time the defendant sent equipment to the plaintiff’s home. The plaintiff contacted the defendant and was told that the two entries would be removed from his credit report. Except the plaintiff now claims that was never done.

The defendant argued that it had a permissible purpose to obtain the plaintiff’s credit report and claims the plaintiff was the victim of identity theft, a claim that the plaintiff says did not occur. Thinking it was engaging in a legitimate business transaction with the plaintiff provided the defendant with a permissible purpose to obtain his credit report, the defendant argued.

The defendant also attempted to argue that it does not make business sense for it to just unilaterally open accounts for people who do not want them and send those people free cell phones. But that was not enough to convince Judge Freda Wolfson of the District Court for the District of New Jersey to dismiss the case.

“Here, Plaintiff’s theory is plausible on its face, and, irrespective of Plaintiff’s failure to identify a motive for Defendant’s behavior, Plaintiff has pled enough factual information to support each element of a Section 1681b claim,” Judge Wolfson wrote.

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