(CN) – A debt collection company had no legal justification for pulling a woman’s credit report to satisfy an alleged debt to a towing company, the 9th Circuit ruled.
Police found an SUV belonging to Maria Pintos parked on the street with expired registration. The vehicle was towed and eventually sold when Pintos failed to claim it or pay the impound costs.
The towing company filed a deficiency claim against Pintos, which it later transferred to collection agency Pacific Creditors Association (PCA).
Pintos said PCA violated the Fair Credit Reporting Act by obtaining her credit report through Experian.
The district court granted summary judgment to the defendants on the basis that they pulled Pintos’ credit to help collect on an account.
“But the district court did not address whether the transaction was a ‘credit transaction involving’ Pintos,” the federal appeals court wrote.
It reversed, saying Pintos’ mere ownership of the car did not mean that she had initiated the credit transaction.
“PCA was not a judgment creditor,” Judge Clifton added. “Its claim against Pintos did not result from a transaction initiated by Pintos.”
Federal law did not authorize PCA to obtain the credit report, the court concluded.