On September 21, 2007 the Ninth Circuit Court of Appeals in a case entitled
Pintos v. Pacific Creditors Association, Case no 04-17485 (September 21, 2007, Ninth Circuit) addressed the
issue of what constitutes a permissible purpose for obtaining a credit bureau report in connection with collection efforts made by Pacific Creditors Association "(Pacific)."

The opinion, written by Judge Clifton, addressed the following facts: Pacific had attempted to collect a towing indebtedness and as part of its collection efforts, Pacific had pulled a consumer's credit bureau report in an attempt to collect the debt. The consumer sued, alleging that there was not a credit transaction required under FACT ACT related to the underlying debt that would then allow the credit bureau to be provided by the credit reporting agency to the debt collector.

The Pintos Court held that the FACT ACT only allows for credit reports to be obtained in connection with collection attempts when there was an underlying "credit transaction" under the FACT ACT. Further, the Court held that a towing debt was not part of a credit transaction.

The Court also found Experian liable for allowing the impermissible pull.

Debt buyers are encouraged to review with their counsel their practices in pulling credit bureau reports in light of this decision.

Please click here to see the full ruling.