Unauthorized credit inquiry legal?

[Alex Berkovsky]

To make a long story short, I am in the middle of a dispute with a private school about a tuition payment. The school has hired a lawyer and I am being sued for that payment. I have received a monthly notification from a credit reporting company that the law firm has run a credit check on me. Is it legal for someone to run a credit check without your knowledge or authorization?

[Tom Winship]

I'm not sure but know that a number of times when I have applied for a home loan, etc., I have had to sign a document giving the lending agency permission to check my credit.

Maybe John Keeton will see this one and advise........

[Neal Clayton]

§ 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b]
(a) In general. Subject to subsection (c), any consumer reporting agency may furnish a
consumer report under the following circumstances and no other:
(1) In response to the order of a court having jurisdiction to issue such an order, or a
subpoena issued in connection with proceedings before a Federal grand jury.
(2) In accordance with the written instructions of the consumer to whom it relates.
(3) To a person which it has reason to believe
(A) intends to use the information in connection with a credit transaction
involving the consumer on whom the information is to be furnished and
involving the extension of credit to, or review or collection of an account
of, the consumer; or
(B) intends to use the information for employment purposes; or
(C) intends to use the information in connection with the underwriting of
insurance involving the consumer; or
(D) intends to use the information in connection with a determination of the
consumer's eligibility for a license or other benefit granted by a
governmental instrumentality required by law to consider an applicant's
financial responsibility or status; or
July 30, 2004 13
(E) intends to use the information, as a potential investor or servicer, or
current insurer, in connection with a valuation of, or an assessment of the
credit or prepayment risks associated with, an existing credit obligation; or
(F) otherwise has a legitimate business need for the information
(i) in connection with a business transaction that is initiated by the
consumer; or
(ii) to review an account to determine whether the consumer continues to
meet the terms of the account.
(4) In response to a request by the head of a State or local child support enforcement
agency (or a State or local government official authorized by the head of such an
agency), if the person making the request certifies to the consumer reporting
agency that
(A) the consumer report is needed for the purpose of establishing an
individual’s capacity to make child support payments or determining the
appropriate level of such payments;
(B) the paternity of the consumer for the child to which the obligation relates
has been established or acknowledged by the consumer in accordance with
State laws under which the obligation arises (if required by those laws);
(C) the person has provided at least 10 days’ prior notice to the consumer
whose report is requested, by certified or registered mail to the last known
address of the consumer, that the report will be requested; and
(D) the consumer report will be kept confidential, will be used solely for a
purpose described in subparagraph (A), and will not be used in connection
with any other civil, administrative, or criminal proceeding, or for any
other purpose.
(5) To an agency administering a State plan under Section 454 of the Social Security
Act (42 U.S.C. § 654) for use to set an initial or modified child support award.

§ 606. Disclosure of investigative consumer reports [15 U.S.C. § 1681d]
(a) Disclosure of fact of preparation. A person may not procure or cause to be prepared an
investigative consumer report on any consumer unless
(1) it is clearly and accurately disclosed to the consumer that an investigative
consumer report including information as to his character, general reputation,
personal characteristics and mode of living, whichever are applicable, may be
made, and such disclosure
(A) is made in a writing mailed, or otherwise delivered, to the consumer, not
later than three days after the date on which the report was first requested,
and
(B) includes a statement informing the consumer of his right to request the
additional disclosures provided for under subsection (b) of this section and
the written summary of the rights of the consumer prepared pursuant to
section 609(c) [§ 1681g]; and
July 30, 2004 32
(2) the person certifies or has certified to the consumer reporting agency that
(A) the person has made the disclosures to the consumer required by paragraph
(1); and
(B) the person will comply with subsection (b).
(b) Disclosure on request of nature and scope of investigation. Any person who procures
or causes to be prepared an investigative consumer report on any consumer shall,
upon written request made by the consumer within a reasonable period of time after
the receipt by him of the disclosure required by subsection (a)(1) of this section,
make a complete and accurate disclosure of the nature and scope of the investigation
requested. This disclosure shall be made in a writing mailed, or otherwise delivered,
to the consumer not later than five days after the date on which the request for such
disclosure was received from the consumer or such report was first requested,
whichever is the later.

the monetary limit on liability for all of the above is low, though, 100-1000 dollars.

i would definitely bring it to your attorney's attention. pretty decent ace in the hole for the trial to make the other attorney look bad for obtaining information illegally.

[Dan Hintz]

Before you go attacking them, make sure you didn't sign any forms when signing up for classes that allow them to check finances... it wouldn't surprise me, especially for an expensive private school.

[Mitchell Andrus]

NY may allow an inquiry persuant to the collection of an on-going obligation. I'm going to guess tuition is on-going until you or they stop the relationship. No judge is going to find in your favor just because an attorney looked into the validity of bringing a case and possibly wasting the court's time and client's money.

You may have a separate issue with the attorney if it is illegal, but it won't make a difference if you owe money. 'sides... how were you harmed?
.

[Alex Berkovsky]

NY may allow an inquiry persuant to the collection of an on-going obligation. I'm going to guess tuition is on-going until you or they stop the relationship. No judge is going to find in your favor just because an attorney looked into the validity of bringing a case and possibly wasting the court's time and client's money.

You may have a separate issue with the attorney if it is illegal, but it won't make a difference if you owe money. 'sides... how were you harmed?
.

I heard that credit inquiries lower your credit rating. I am not looking to sue the law firm, but request to have it removed from my record.

[John Shuk]

John Keeton has in the past stated that he NEVER gives legal advice online.

Not being harmed does not make an invasion of privacy OK. I don't want people who do not belong in my business in my business.

[Don Alexander]

if you think you have any privacy methinks you are sadly mistaken

that being said i wouldn't appreciate what you described either

[John Pratt]

Others may correct me if I am wrong here, but what I was told by my bank is that there are numerous credit inquiries on your credit all the time without your notification (i.e. a credit card company tring to decide if they want to send you a card application). What can hurt your credit or credit score are numerous credit applications or credit inquiries initiated by you or authorized by you (i.e. you apply for 6 different credit cards which require a credit check).

[Dan Hintz]

Credit inquiries initiated by companies such as utilities, credit card companies looking for you, etc. do not affect your credit... the system is designed to handle these types of inquiries. Credit inquiries that you initiate (car/house shopping, requesting new card accounts, etc.) lower your score a bit, but these inquiries are combined into a reasonable 30-45 day period, so your score may only drop 5-10 points, and it lasts for no more than 90 days. Applying for multiple cards shows up almost immediately, so if you apply for 6 in one day, all 6 of those companies will see all of the applications and accept/deny you with all of them in mind.