http://www.law.cornell.edu/uscode/15/usc_sec_15_00001681---b000-.html
When you think of your own personal assets, chances are your home, car, and savings and investments come to mind. But what about your Social Security number (SSN), telephone records and your bank and credit card account numbers? To people known as “pretexters,” that information is a personal asset, too.
Pretexting is the practice of getting your personal information under false pretenses. Pretexters sell your information to people who may use it to get credit in your name, steal your assets, or to investigate or sue you. Pretexting is against the law.
Pretexters use a variety of tactics to get your personal information. For example, a pretexter may call, claim he’s from a survey firm, and ask you a few questions. When the pretexter has the information he wants, he uses it to call your financial institution. He pretends to be you or someone with authorized access to your account. He might claim that he’s forgotten his checkbook and needs information about his account. In this way, the pretexter may be able to obtain personal information about you such as your SSN, bank and credit card account numbers, information in your credit report, and the existence and size of your savings and investment portfolios.
Keep in mind that some information about you may be a matter of public record, such as whether you own a home, pay your real estate taxes, or have ever filed for bankruptcy. It is not pretexting for another person to collect this kind of information.
There Is Under federal law — the Gramm-Leach-Bliley Act — it’s illegal for anyone to:
use false, fictitious or fraudulent statements or documents to get customer information from a financial institution or directly from a customer of a financial institution.
use forged, counterfeit, lost, or stolen documents to get customer information from a financial institution or directly from a customer of a financial institution.
ask another person to get someone else’s customer information using false, fictitious or fraudulent statements or using false, fictitious or fraudulent documents or forged, counterfeit, lost, or stolen documents.
The Federal Trade Commission Act also generally prohibits pretexting for sensitive consumer information.
The Link to Identity Theft Pretexting can lead to identity theft. Identity theft occurs when someone hijacks your personal identifying information to open new charge accounts, order merchandise, or borrow money. Consumers targeted by identity thieves often don’t know they’ve been victimized until the hijackers fail to pay the bills or repay the loans, and collection agencies begin dunning the consumers for payment of accounts they didn’t even know they had.
According to the Federal Trade Commission (FTC), the most common forms of identity theft are:
Credit Card Fraud — a credit card account is opened in a consumer’s name or an existing credit card account is “taken over”;
Communications Services Fraud — the identity thief opens telephone, cellular, or other utility service in the consumer’s name;
Bank Fraud — a checking or savings account is opened in the consumer’s name, and/or fraudulent checks are written; and
Fraudulent Loans — the identity thief gets a loan, such as a car loan, in the consumer’s name.
The Identity Theft and Assumption Deterrence Act makes it a federal crime when someone: “knowingly transfers or uses, without lawful authority, a means of identification of another person with the intent to commit, or to aid or abet, any unlawful activity that constitutes a violation of federal law, or that constitutes a felony under any applicable state or local law.”
Under the Identity Theft Act, a name or SSN is considered a “means of identification.” So is a credit card number, cellular telephone electronic serial number or any other piece of information that may be used alone or in conjunction with other information to identify a specific individual.
Even though the laws are on your side, it’s wise to take an active role in protecting your information.
1) Don’t give out personal information on the phone, through the mail or over the Internet unless you’ve initiated the contact or know who you’re dealing with. Pretexters may pose as representatives of survey firms, banks, Internet service providers and even government agencies to get you to reveal your SSN, mother’s maiden name, financial account numbers and other identifying information. Legitimate organizations with which you do business have the information they need and will not ask you for it.
2) Be informed. Ask your financial institutions for their policies about sharing your information. Ask them specifically about their policies to prevent pretexting.
3) Pay attention to your statement cycles. Follow up with your financial institutions if your statements don’t arrive on time.
4) Review your statements carefully and promptly. Report any discrepancies to your institution immediately.
5) Alert family members to the dangers of pretexting. Explain that only you, or someone you authorize, should provide personal information to others.
6) Keep items with personal information in a safe place. Tear or shred your charge receipts, copies of credit applications, insurance forms, bank checks and other financial statements that you’re discarding, expired charge cards and credit offers you get in the mail.
7) Add passwords to your credit card, bank and phone accounts. Avoid using easily available information like your mother’s maiden name, your birth date, the last four digits of your SSN or your phone number, or a series of consecutive numbers.
8) Be mindful about where you leave personal information in your home, especially if you have roommates or are having work done in your home by others.
9) Find out who has access to your personal information at work and verify that the records are kept in a secure location.
Order a copy of your credit report from the three nationwide consumer reporting companies every year. An amendment to the federal Fair Credit Reporting Act requires each of the major nationwide consumer reporting companies to provide you with a free copy of your credit reports, at your request, once every 12 months. To order your free annual report from one or all of the nationwide consumer reporting companies, visit www.annualcreditreport.com, call toll-free 1-877-322-8228, or complete the Annual Credit Report Request Form and mail it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281. You can print the order form from ftc.gov/credit. Do not contact the three nationwide consumer reporting companies individually. They provide free annual credit reports only through www.annualcreditreport.com, 1-877-322-8228, and Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
Your credit report contains information on where you work and live, the credit accounts that have been opened in your name, how you pay your bills and whether you’ve been sued, arrested or have filed for bankruptcy. Checking your report annually can help you catch mistakes and fraud before they wreak havoc on your personal finances.
If you think you’ve been a victim of pretexting, the FTC recommends that you:
1) Report it to your financial institution immediately. Close accounts that have been tampered with and open new ones with new Personal Identification Numbers (PINs) and passwords.
2) Contact the fraud departments at one of the three major credit reporting companies immediately. Tell them to flag your file with a fraud alert including a statement that creditors should get your permission before opening any new accounts in your name. The company you contact will transmit your request to the other two.
Equifax: call: 1-800-525-6285 and write: P.O. Box 740241, Atlanta, GA 30374-0241
Experian: call: 1-888-EXPERIAN (1-888-397-3742) and write: P.O. Box 949, Allen, TX 75013-0949
Trans Union: call: 1-800-680-7289 and write: Fraud Victim Assistance Division, P.O. Box 6790, Fullerton, CA 92634
3) Contact your local police as soon as possible, and ask to file a report. Even if the police can’t catch the pretexter, having a police report can help you in clearing up your credit records later on.
4) Contact the Federal Trade Commission as soon as possible. The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-ID-THEFT (1-877-438-4338), or use the complaint form at www.ftc.gov/idtheft. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
If you’ve been a victim of identity theft, file a complaint with the FTC by contacting the FTC’s Identity Theft Hotline by telephone: toll-free 1-877-ID-THEFT (1-877-438-4338); TDD: 202-326-2502; by mail: Identity Theft Clearinghouse, Federal Trade Commission, 600 Pennsylvania Avenue, NW, Washington, DC 20580; or online: www.consumer.gov/idtheft.
The FTC has published a free booklet, Take Charge: Fighting Back Against Identity Theft. This comprehensive guide includes information on what consumers can do to reduce their risk of ID theft; how consumers can protect their personal information; the steps consumers can take if they do become victims of ID theft; and a directory of government resources available to ID theft victims. For your copy, visit www.consumer.gov/idtheft.
Defendant violates FCRA if it obtains a consumer report on Plaintiff for the purposes of investigating his claim. Such an inquiry is not permissible under FCRA.
The Fair Credit Reporting Act requires that users of consumer information may not obtain such information from credit reporting agencies under false pretenses. The standard for determining whether a user has obtained a consumer report under "false pretenses" is whether the user had a permissible purpose for the consumer report. If you find that Defendant obtained Plaintiffs consumer report but did not have one of the allowable purposes in obtaining the consumer report, you must find that Defendant obtained Plaintiff's consumer report under false pretenses.
15 U.S.C. §1681b Plaintiff contends that the defendant violated the Act in the following two particulars: First, Associates obtained the consumer credit report of Plaintiff without a permissible purpose.
15 U.S.C. §1681q Defendant obtained the consumer credit report of Plaintiff from a consumer reporting agency under false pretenses.
15 U.S.C. § 1681b(f) (new in 1996 amendment) Defendant may not obtain or use information from a consumer's report unless it has met two conditions. First, the report must be obtained for a purpose specifically authorized by the Act. Second, Defendant must certify, either generally or specifically, that it has such an authorized purpose.
Russell v. Shelter Financial Services, 604 F. Supp. 201, 203 (W.D. Mo. 1984) (defendant's burden to prove request for consumer's information proper)
In order to recover on his claim that Defendant accessed information from his credit report with no permissible purpose, Plaintiff must show that Defendant accessed his credit report, and he had no account with Defendant and had not applied for credit to Defendant. Then the burden shifts to Defendant to explain what reasons it had which were permitted by the statute for pulling Plaintiff's credit report.
TRW Inc. v. Andrews, __ U.S. __, No. 00-1045, 2001 WL 1401902, at *3 (Nov. 13, 2001) (citations omitted).
Congress enacted the FCRA in 1970 to promote efficiency
in the Nation's
banking system and to protect consumer privacy. As
relevant here, the
Act seeks to accomplish those goals by requiring credit
reporting
agencies to maintain "reasonable procedures" designed "to
assure maximum
possible accuracy of the information" contained in credit
reports and to
"limit the furnishing of [such reports] to" certain
statutorily
enumerated purposes.
The following cases all pre-date the 1996 amendments, which confirm their holdings:
Rice v. Montgomery Ward & Co., Inc., 450 F. Supp. 668, 670-72 (M.D. N.C. 1978) (improper to obtain credit report after suit filed for use in litigation); Klapper v. Shapiro, 586 N.Y. S.2d 846 (1992) (no privilege for attorney who uses credit report on opposing attorney during litigation); Bils v. Nixon, Hargrave, Devans & Doyle, 880 P.2d 743 (Ariz. App. 1994) (improper to get report to discover information which might be used in litigation); v. Handmaker, 149 F.3d 424, 426-28 (6th Cir. 1998) (no legitimate business need to obtain report to prepare for litigation); Bakker v. McKinnon, 152 F.3d 1007, 1011-12 (8th Cir. 1998) (same); Comeaux v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1267, 1273-74 (9th Cir. 1990) (at least negligence, as a matter of law, to obtain consumer report for use in litigation); Auriemma v. Montgomery, 860 F.2d 273, 279, 280-81 (7th Cir. 1988) (extra-judicial investigation by attorneys improper; no privilege); Russell v. Shelter Financial Services, 604 F. Supp. 201, 203 (W.D. Mo. 1984) (defendants burden to prove request for consumers information proper); Mone v. Dranow, 945 F.2d 306, 308 (9th Cir. 1991) (obtaining credit report to investigate for purposes of litigation improper); Yohay v. City of Alexandria Employees Credit Union, Inc., 827 F.2d 967, 971 (4th Cir. 1987) (improper for attorney to get spouses report to use in litigation); Boothe v. TRW Credit Data, 557 F. Supp. 66, 70-71 (S.D.N.Y. 1982); Rylewicz v. Beaton Services, Ltd., 698 F. Supp. 1391, 1400 n.10 (N.D. Ill. 1988), affd 888 F.2d 1175, 1181 (7th Cir. 1989); Houghton v. N.J. Manufacturers Ins. Co., 795 F.2d 1144, 1149 (3d Cir. 1986) (obtaining report after litigation for use in litigation improper).
The Act states the "permissible purposes" for which a consumer report may be obtained. With regard to the facts of this case, the only possible purposes for which Defendant could obtain information from Plaintiff's credit report are EITHER that Defendant both intended to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished AND the credit transaction involves the extension of credit to, or review or collection of an account of Plaintiff, §1681b(1)(3)(A); OR Defendant otherwise had a legitimate business need for the information in connection with a business transaction that was initiated by Plaintiff
15 U.S.C. §1681q; 15 U.S.C. §1681b. Hansen v. Morgan, 582 F.2d 1214, 1219-20 (9th Cir. 1978); Comeaux v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1273 (9th Cir. 1990); Zamora v. Valley Federal Savings & Loan Assn., 811 F.2d 1368, 1370 (10th Cir. 1987) (statutory list is exclusive).
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