Class Can Advance on Credit-Reporting Agency

CHICAGO (CN) - A credit-reporting company that specializes in the high-risk market must face claims that it sold consumers' personal information, a federal judge ruled.

Teletrack sells consumer credit reports to businesses, such as payday and high-interest lenders, rental-purchase stores, and no-prime auto lenders. Its clients use the reports to determine whether and how to provide consumers with credit.

Businesses provide Teletrack with personal information about the consumer they want to investigate, including the individual's name, home address, Social Security number, phone numberand date of birth.

The lawsuit claims, however, that Teletrack compiles this personal information into a database and illegally sells the information to third parties.

Teletrack paid $1.8 million last year to settle claims by the Federal Trade Commission that this conduct violated the Fair Credit Reporting Act.

Danita Henry, Terrence Flowers, Alonzo Patterson and Andre Jones contend that they each obtained a payday or high-interest loan within the past few years, and that now marketers have their information. They say they received solicitations from other payday or high-interest lenders as well as calls demanding payments for loans that they did not obtain, and claim that these solicitations are a result of Teletrack's disclosure of their personal information.

U.S. District Judge Sharon Coleman refused to dismiss last week, finding that the plaintiffs have established standing to bring a Fair Credit Reporting Act (FCRA) claim.

"The FCRA statute does not authorize suits by the public at large, but instead, creates an individual right not to have unlawful practices occur with respect to one's own consumer reports," Coleman said. "Therefore, there is a connection between the individual plaintiffs and the violation alleged such that, the plaintiffs have adequately alleged an individual injury in fact under the FCRA."

Furthermore, "assuming as we must at this stage that plaintiffs' allegations are true, the plaintiffs constitute a class of people who were customers of Teletrack and who were likely to be included in Teletrack's marketing lists," the eight-page decision states. "Further, plaintiffs have received unsolicited phone calls from third parties presumed to be customers of Teletrack. A reasonable inference can be made that these unsolicited phone calls were the result of Teletrack furnishing plaintiffs' personal information to third parties, in violation of the FCRA."

"To establish standing at this stage, a plaintiff need only show that the injury is 'fairly traceable' to the conduct alleged," the judge concluded. "Plaintiffs have done so here."

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