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Tatro v. Equifax Information Services, LLC

United States District Court, D. Rhode Island

December 12, 2018

MICHAEL P. TATRO, Plaintiff,
v.
EQUIFAX INFORMATION SERVICES, LLC, ENCORE CAPITAL GROUP, INC., MIDLAND FUNDING LLC, MIDLAND CREDIT MANAGEMENT, INC, CONVERGENT OUTSOURCING, INC, FRONTLINE ASSET STRATEGIES LLC, and ESC/CREDIT BASICS, Defendants.

          MEMORANDUM AND ORDER

          JOHN J. MCCONNELL, JR, UNITED STATES DISTRICT JUDGE

         Defendants Encore Capital Group, Inc, Midland Funding LLC, and Midland Credit Management, Inc. move to dismiss Plaintiff Michael P. Tatro's Complaint for failure to state a claim on which relief can be granted under Fed.R.Civ.P. 12(b)(6). ECF No. 20. For reasons set forth below, the Court GRANTS Defendants' Motion.

         I. BACKGROUND

         Defendants Encore Capital Group, Inc., Midland Funding LLC, and Midland Credit Management, Inc. (collectively "the Midland Defendants") are a "consortium of entities whose primary purpose is the collection of third-party debt."[1] ECF No. 1- 1 at 6. On September 18, 2016, the Midland Defendants transferred Mr. Tatro's means of identification, including, but not limited to his name, date of birth, and portions of social security No. to Trans Union, a consumer reporting agency, to obtain a credit report. In doing so, the Midland Defendants certified the permissible purpose of the request as collection. Mr. Tatro denies that he is a customer or judgment debtor of Midland Credit Management, Inc. ("MCM"), and asserts that he did not grant permission to the Midland Defendants to obtain his credit report. Upon discovering that MCM requested and received his credit report, Mr. Tatro contacted MCM to identify the debt it was trying to collect, providing his date of birth and the last six digits of his social security number. MCM was unable to locate an account in Mr. Tatro's name based on the information he had provided and requested further identifying information, including his social security No. in full, or previous address, and full name. Mr. Tatro did not provide this additional information.

         Mr. Tatro brought this action alleging Defendants violated his privacy rights as well as his rights under state and federal statutes relating to credit reporting and debt collection. As to the moving Midland Defendants, Mr. Tatro claims that they improperly accessed his credit report without a permissible purpose. Mr. Tatro asserts that by this conduct, the Midland Defendants violated the federal Fair Credit Reporting Act ("FCRA"), committed identity fraud as defined under state law, invaded his privacy, negligently disclosed his personal information, and converted his personal identity.

         II. STANDARD OF REVIEW

         In reviewing a motion to dismiss for failure to state a claim, the Court accepts a plaintiffs allegations as true and draws all reasonable inferences in his favor. Gargano v. Liberty Int'l Underwriters, Inc., 572 F.3d 45, 48 (1st Cir. 2009). To withstand "a motion to dismiss, a complaint must allege 'a plausible entitlement to relief."' ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 58 (1st Cir. 2008) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)); see also Ashcroft v. Iqbal, 556 U.S. 662 (2009). That said, conclusory allegations, recitations of the elements, and legal conclusions cannot meet the standard. Twombly, 550 U.S. at 555; see also Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir. 1998) ("[A] plaintiff...is...required to set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.").

         III. DISCUSSION

         Mr. Tatro's primary theory of liability is that the Midland Defendants obtained his credit report without a permissible purpose. He asserts that by doing so, the Midland Defendants violated the FCRA, committed identity fraud, invaded his privacy, negligently disclosed his personal information, and converted his personal identity.[2] The Midland Defendants move to dismiss alleging that Mr, Tatro has not alleged the necessary elements of the claimed violations. The Court agrees.

         A. The Fair Credit Reporting Act Claim Fails Because Mr. Tatro Has Not Plausibly Alleged the Elements of a Violation

         To get beyond the pleading stage of a FCRA claim, "Plaintiff first must set forth facts sufficient to plausibly allege that: (1) Defendant obtained the credit reports for an impermissible purpose; and (2) that Defendant's conduct was either willful or negligent." Lecaj v. Green Tree Servicing, LLC, 130 F.Supp.3d 469, 470 (D. Mass. 2015) (citing Perez v. Portfolio Recovery Assocs., LLC, No. CIV. 12-1603 JAG, 2012 WL 5373448, at *2 (D.P.R. Oct. 30, 2012)). Mr. Tatro's allegations fall short.

         Mr. Tatro alleges no facts sufficient to plausibly allege that the Midland Defendants had an "impermissible" purpose. Mr. Tatro claims that the purported lack of a permissible purpose is alleged because MCM could not locate any account in his name. ECF No. 1-1 at ¶ 123. However, courts have found that a credit report may be permissibly obtained simply to review an account. See Perez, 2012 WL 5373448, at *8 ("no part of the FCRA prevents third-parties from searching a person's credit report, even ones with no previous relationship to the third person, provided that the inquiry is done for permissible purposes.")) see also Daniel v. Midland Funding; LLC, No. 15-CV-10956, 2016 WL 4253886, at *4 (E.D. Mich. Aug. 12, 2016) ("actual ownership or authority to collect on a debt is not necessary for a debt collected to permissibly obtain a credit report; for example, it is permissible for potential debt buyers to obtain a credit report to determine whether it will purchase the debt"). Moreover, contrary to Mr. Tatro's argument, the FCRA does not require debt collectors to verify the accounts they look to collect. See Robinson v. Greystone Alliance, LLC, No. BPG-10-3658, 2011 WL 2601573, at *3 (D. Md. June 29, 2011) ("As long as the debt collector has reason to believe that the consumer owes the debt, the debt collector may permissibly obtain the consumer's credit report without violating the FCRA").

15 U.S.C. § 1681b provides, in relevant part:
a) In general Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the ...

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