Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-3_10-cv-08038/USCOURTS-azd-3_10-cv-08038-0/pdf.json

Nature of Suit Code: 480
Nature of Suit: Consumer Credit
Cause of Action: 15:1681 Fair Credit Reporting Act

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Christine Baker,

Plaintiff, 

vs.

Trans Union LLC; Trans Union Interactive

Inc.; Verifacts Inc.; Stacy Aull; Jane Doe,

Defendants. 

)

)

)

)

)

)

)

)

)

)

)

)

)

No. CV-10-8038-PCT-NVW

ORDER

On October 16, 2009, Plaintiff Christine Baker sued Defendants Trans Union LLC

(“Trans Union”), Trans Union Interactive Inc. (“TU Interactive”), Verifacts Inc.

(“Verifacts”), Stacy Aull, and Jane Doe for various alleged violations of the Fair Credit

Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq., and the Fair Debt Collection Practices

Act (“FDCPA”), 15 U.S.C. § 1692 et seq. Now before the Court are Defendants Trans

Union and TU Interactive’s Motion to Dismiss (doc. # 4), and Defendants Verifacts,

Stacy Aull, and Jane Doe’s Motion to Dismiss (doc. # 10). Defendants move to dismiss

all claims pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim.

I. Legal Standard

To survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss, a complaint must “state a

claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949

(2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is

plausible if it contains sufficient factual matter to permit a reasonable inference that the

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 1 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 2 -

defendant is liable for the conduct alleged. Id. “Threadbare recitals of the elements of a

cause of action, supported by mere conclusory statements, do not suffice.” Id. Therefore,

while all of the plaintiff’s factual allegations are accepted as true, mere legal conclusions

are not. Id. In determining the factual allegations, generally only the face of the

complaint and any attached exhibits may be considered. Knievel v. ESPN, 393 F.3d 1068,

1076 (9th Cir. 2005). However, under the incorporation by reference doctrine, any

documents “whose contents are alleged in [the] complaint and whose authenticity no

party questions” may also be considered. Id.

II. Factual Allegations

A. Trans Union & TU Interactive

Defendant Trans Union is a consumer reporting agency. On July 1, 2009, Plaintiff

Christine Baker attempted to order her consumer report on Trans Union’s website. 

However, all links for consumer reports transferred her to TrueCredit.com. TrueCredit is

owned and operated by TU Interactive, a reseller of credit data, and is primarily a

marketing tool for various credit-related businesses. Unable to order her consumer report

on Trans Union’s website, Baker signed up for TrueCredit monitoring and ordered a

consumer report from TrueCredit. What she received was a report that did not indicate

the estimated deletion dates for “derogatory data” and did not disclose promotional and

account review credit inquiries. It also contained “the incorrect alias ‘Christian Baker’,

incorrect addresses and other incorrectly reported data.” Finally, the report reflected an

April 24, 2009 credit inquiry by Verifacts, an entity in the business of skip-tracing on

behalf of debt collectors. 

That same day, Baker contacted Trans Union’s attorney Tiffany Cox of

Strasburger & Price LLP to dispute the incomplete, inaccurate consumer report and to

request the permissible purpose for the Verifacts credit inquiry. Ms. Cox responded:

...

3. The TrueCredit report attached to your email is a “credit report” not a

“disclosure” and will not contain all the information found in a disclosure;

...

5. Trans Union is still reinvestigating the 4/24/09 Verifacts inquiry and will

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 2 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 3 -

supplement this response when more information is available.

...

After receiving the response, Baker sent an email to Ms. Cox in which she again 

requested the permissible purpose for the Verifacts credit inquiry, asked for the source of

the incorrect information in the report, asked where she could obtain a complete “Trans

Union consumer disclosure (credit report),” and requested a refund of the fees she paid to

TrueCredit. To date, she has received no response. When Baker contacted TrueCredit

directly to request a refund, her request was declined.

To date, Trans Union has neither corrected Baker’s consumer report nor identified

the source of the incorrect information. Furthermore, instead of informing Baker of the

permissible purpose for the Verifacts inquiry, it simply deleted the inquiry. Baker was

“especially upset” that the report reflected the alias “Christian Baker” as it was the subject

of previous litigation. She believes that Trans Union deliberately added false information

to her consumer report “to cause her aggravation and stress in retaliation for her previous

litigation.”

B. Verifacts, Stacy Aull & Jane Doe

According to its website, Verifacts is “[t]he Specialist in the Science and Art of

Skip Tracing” and “provid[es] the credit/collections industry with high quality location

information” partly through “expert phone inquiry.” On or about May 22, 2009, a Jane

Doe from Verifacts called Baker and attempted to obtain her address. When Baker

inquired as to the purpose of the inquiry, Jane Doe informed her that she was updating

their database for creditors and, after refusing to provide further information, gave Baker

the telephone number for Verifacts. When Baker called Verifacts, she spoke with Stacy

Aull, who denied being in the collections business and insisted that she had a right to call

consumers without identifying herself as a collector. Neither Jane Doe nor Stacy Aull

identified themselves as collectors, neither informed Baker of her right to dispute

pursuant to 15 U.S.C. § 1692g, and neither disclosed that all information she provided

would be used to collect debts. 

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 3 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 4 -

After Baker saw the April 24, 2009 Verifacts credit inquiry on her TrueCredit

consumer report on July 1, 2009, she faxed a request for the permissible purpose for the

inquiry directly to Verifacts. She received no response. 

III. Analysis

A. Trans Union

1. 15 U.S.C. § 1681b 

Baker first maintains that Trans Union “willfully and negligently sold [her] credit

data to persons without permissible purpose” in violation of § 1681b, which permits

consumer reporting agencies to furnish consumer reports to third parties only in limited

circumstances, including, among others, in response to a court order, in accordance with

written instructions from the consumer to whom the report relates, and to a person the

agency has “reason to believe” intends to use the information for permissible purposes. 

See 15 U.S.C. § 1681b(a). As Trans Union points out, the Complaint does not specify

whether the claim arises from Trans Union’s release of Baker’s credit data to TU

Interactive, its release of her information to Verifacts, or both. According to Baker’s

Response, it arises from both.

 As to TU Interactive, apart from the conclusory nature of the allegation, Baker

cannot state a claim under § 1681b because she alleges that TU Interactive is a reseller of

credit data. According to Federal Trade Commission (“FTC”) commentary on the FCRA,

consumer reporting agencies such as Trans Union are permitted to release credit

information to third-party agencies who, in turn, intend to sell or otherwise release the

information for permissible purposes. See 16 C.F.R. Pt. 600, App., § 604 General (“A

consumer reporting agency may furnish a consumer report to another consumer reporting

agency for it to furnish pursuant to a subscriber’s request. In these circumstances, one

consumer reporting agency is acting on behalf of another.”). By alleging that TU

Interactive is a reseller of credit information, Baker has pled herself out of a § 1681b

claim arising from Trans Union’s release of her information to TU Interactive. Moreover,

to the extent Trans Union owns and operates TU Interactive, as Baker suggests in her

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 4 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 5 -

Response, a transfer of consumer information between the two does not amount to the

furnishing of a consumer report subject to the permissible purpose requirements of §

1681b. See 15 U.S.C. § 1681a(d)(2)(ii) (excluding from the definition of “consumer

report” any communication of consumer information “among persons related by common

ownership or affiliated by corporate control”). 

The claim also fails with respect to Verifacts. Apart from the conclusory nature of

the allegation, which renders the claim insufficient on its own, the sole basis for the claim

is that Verifacts is “apparently not a collector,” but rather a skip-tracer. The reasoning is

flawed as a matter of law. Consumer reporting agencies are permitted to furnish

consumer reports to persons they have reason to believe intend to use the credit

information to collect a debt owed by the consumer. See id. § 1681b(a)(3)(A) (“review or

collection of an account” is a permissible purpose). That permission extends to collection

agencies and “detective agenc[ies] or private investigator[s]” alike. 16 C.F.R. Pt. 600,

App., § 604(3)(A). Because skip-tracers are in the business of locating debtors to

facilitate the collection of debts by creditors, their practices fall within the scope of

permissible purposes under § 1681b(a)(3)(A). See Baker v. Bronx-Westchester

Investigations, Inc., 850 F. Supp. 260, 262 n.5 (S.D.N.Y. 1994) (finding no material

distinction between hiring an investigator to actually collect a debt and hiring one merely

to locate the debtor for purposes of debt collection). Baker has therefore failed to state a

claim against Trans Union under § 1681b. Because the deficiencies cannot be cured, the

claim will be dismissed without leave to amend. See Doe v. United States, 58 F.3d 494,

497 (9th Cir. 1995) (court should grant leave to amend unless the pleading cannot be

cured by the allegation of additional facts). 

2. 15 U.S.C. § 1681e

Baker next alleges that Trans Union violated § 1681e(a) by “willfully and

negligently fail[ing] to maintain reasonable procedures to avoid violations of §

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 5 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 6 -

1681b . . . .” Stating a claim under § 1681b is a prerequisite to asserting a claim under §

1681e(a) because without a § 1681b violation, there is no basis to challenge a consumer

reporting agency’s preventative procedures. See Washington v. CSC Credit Servs. Inc.,

199 F.3d 263, 266-67 (5th Cir. 2000) (purpose of § 1681e(a) “is not furthered unless a

plaintiff suffers the harm the procedures are meant to prevent.”); see also Hinton v. Trans

Union, LLC, 654 F. Supp. 2d 440, 450 (E.D. Va. 2009); Harris v. Database Mgmt. &

Mktg., Inc., 609 F. Supp. 2d 509, 517 (D. Md. 2009). As explained supra, Baker has

incurably failed to state a claim against Trans Union under § 1681b. Therefore, her §

1681e(a) claim will similarly be dismissed without leave to amend.

Baker also contends that Trans Union violated § 1681e(b), which requires

consumer reporting agencies, in preparing consumer reports, to “follow reasonable

procedures to assure maximum possible accuracy of the information concerning the

individual about whom the report relates.” An agency that willfully fails to comply is

liable for actual damages or damages not greater than $1,000, punitive damages,

reasonable attorneys’ fees, and costs. 15 U.S.C. § 1681n. An agency that negligently

fails to comply is liable for actual damages, reasonable attorneys’ fees, and costs. Id. §

1681o. 

To make out a prima facie claim under § 1681e(b), a consumer must “show that a

credit reporting agency prepared a report containing inaccurate information.” Guimond v.

Trans Union Credit Info. Co., 45 F.3d 1329, 1333 (9th Cir. 1995) (citing Cahlin v. Gen.

Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir. 1991)). The agency can then

escape liability by demonstrating that the inaccuracies were reported despite the agency’s

reasonable procedures. Id. Therefore, to state a claim, a consumer need only allege that

the consumer reporting agency prepared an inaccurate report. Henson v. CSC Credit

Servs., 29 F.3d 280, 284 (7th Cir. 1994) (citing Cahlin, 936 F.2d at 1156); Baker v. Trans

Union LLC, No. CV 07-8032-PCT-JAT, 2008 WL 4838714, at *5, 2008 U.S. Dist.

LEXIS 93266, at *13-14 (D. Ariz. Nov. 5, 2008); Valentine v. First Advantage Saferent,

Inc., No. EDCV 08-142-VAP (JCRx), 2008 WL 4367353, at *2, 2008 U.S. Dist. LEXIS

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 6 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 7 -

80764, at *4-5 (C.D. Cal. Sept. 23, 2008). Trans Union contends that publication of the

inaccurate information to a third party is a required element of the claim, but the Court is

aware of no Ninth Circuit authority to that effect. To the contrary, the Ninth Circuit has

indicated that transmission of the report to third parties is not a prerequisite to

establishing liability under § 1681e(b). See Guimond, 45 F.3d at 1333. 

Baker’s allegation that her consumer report included “the incorrect alias ‘Christian

Baker’, incorrect addresses and other incorrectly reported data” is therefore sufficient to

state a prima facie claim under § 1681e(b) at this early stage in the proceeding. She has

not, however, sufficiently pled actual damages. While emotional distress and humiliation

do fall within the scope of actual damages for purposes of the FCRA, see Dennis v. BEH1, LLC, 520 F.3d 1066, 1069 (9th Cir. 2008); Guimond, 45 F.3d at 1333, there is no

allegation that Baker suffered emotional distress or humiliation. The Complaint states

only that she was “especially upset,” and while it also states that she believes Trans Union

deliberately added false information to her credit report “to cause her aggravation and

stress,” it fails to allege that Baker did in fact suffer aggravation and stress. Because

these deficiencies are curable, however, the claim is dismissed with leave to amend.

3. 15 U.S.C. § 1681g

Baker also alleges that Trans Union “willfully and negligently failed to provide

consumer disclosures” in violation of § 1681g, which requires all consumer reporting

agencies to clearly and accurately disclose to the consumer, upon request, all information

in the consumer’s “file,” sources of the information, the identities of certain recipients of

the consumer’s “consumer report,” and other credit-related information outlined in the

provision. See 15 U.S.C. § 1681g(a). 

The claim fails because while Baker has alleged that she requested a consumer

report from Trans Union, she has made no allegation that she requested a consumer

disclosure from Trans Union. Though she alleges that she asked Trans Union’s attorney,

Tiffany Cox, where she could obtain a complete “Trans Union consumer disclosure

(credit report),” asking where one can obtain a consumer disclosure is not the equivalent

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 7 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 8 -

of an actual request for a disclosure. 

Moreover, the inquiry reveals a more fundamental flaw in the claim. That Baker

asked where she could obtain a complete “consumer disclosure (credit report)” reflects

her misunderstanding of the distinction between consumer disclosures and consumer

reports. The text of the FCRA and FTC commentary thereon indicate that the two are not

one and the same. See Nunnally v. Equifax Info. Servs., LLC, 451 F.3d 768, 772-73 (11th

Cir. 2006). Section 1681g(a)(3)(A) is itself evidence of the distinction in that it requires

consumer reporting agencies, as part of the disclosure, to reveal the identities of certain

recipients of the individual’s “consumer report.” Furthermore, the term “file,” as used in

§ 1681g(a), is defined as all consumer information recorded and retained by the consumer

reporting agency, regardless of how the information is stored. 15 U.S.C. § 1681a(g). As

clarified by FTC commentary, the term “denotes all information on the consumer that is

recorded and retained by a consumer reporting agency that might be furnished, or has

been furnished, in a consumer report on that consumer,” indicating that consumer reports

contain a subset of the information in the consumer’s file. 16 C.F.R. Pt. 600, App., §

603(g). Finally, 15 U.S.C. § 1681i(a)(6)(B)(ii) requires consumer reporting agencies to

provide consumers with a consumer report “based upon” the consumer’s file after a

reinvestigation. If they were one and the same, the terms would be redundant. See

Nunnally, 451 F.3d at 773. Because Baker’s claim is apparently premised on the faulty

assumption that consumer disclosures are the equivalent of consumer reports, the claim is

dismissed without leave to amend. 

4. 15 U.S.C. § 1681i

Baker finally asserts that Trans Union “willfully and negligently failed to provide

complete and correct consumer reports after receiving factual disputes” in violation of §

1681i. Pursuant to 15 U.S.C. § 1681i(a)(1)(A): 

[I]f the completeness or accuracy of any item of information contained in a

consumer’s file at a consumer reporting agency is disputed by the consumer

and the consumer notifies the agency directly, or indirectly through a reseller,

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 8 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 9 -

of such dispute, the agency shall, free of charge, conduct a reasonable

reinvestigation to determine whether the disputed information is inaccurate and

record the current status of the disputed information, or delete the item from

the file . . . before the end of the 30-day period beginning on the date on which

the agency receives the notice of the dispute from the consumer or reseller.

The agency must also provide “written notice to a consumer of the results of a

reinvestigation” as well as “a consumer report that is based upon the consumer’s file as

that file is revised as a result of the reinvestigation” within 5 business days of the

completion of the reinvestigation. Id. § 1681i(a)(6)(A), (B). As explained supra, an

agency that willfully fails to comply is liable for actual damages or damages not greater

than $1,000, punitive damages, reasonable attorneys’ fees, and costs. 15 U.S.C. § 1681n. 

An agency that negligently fails to comply is liable for actual damages, reasonable

attorneys’ fees, and costs. Id. § 1681o. 

Baker alleges that the consumer report she received from TrueCredit did not

identify the estimated deletion dates for “derogatory data,” did not disclose promotional

and account review credit inquiries, reflected an April 24, 2009 credit inquiry by

Verifacts, and contained “the incorrect alias ‘Christian Baker’, incorrect addresses and

other incorrectly reported data.” She also alleges that she disputed the completeness and

accuracy of the data with Trans Union’s attorney Tiffany Cox, who responded, in part:

...

3. The TrueCredit report attached to your email is a “credit report” not a

“disclosure” and will not contain all the information found in a disclosure;

...

5. Trans Union is still reinvestigating the 4/24/09 Verifacts inquiry and will

supplement this response when more information is available.

...

Finally, she alleges that Trans Union subsequently deleted the Verifacts inquiry but has

neglected both to correct some of the inaccuracies and/or provide the source of the

inaccurate information.

Trans Union argues that Baker cannot state a claim because her contact with Ms.

Cox did not constitute notification of the dispute to Trans Union directly or indirectly

through a reseller of credit information, as required by § 1681i(a)(1)(A). The argument is

unpersuasive, at least in this particular case. Whether or not notice provided to a credit

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 9 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 10 -

reporting agency’s attorney satisfies the notice requirements of § 1681(a)(1)(A) in a

technical sense, it is evident that Ms. Cox did in fact communicate the dispute to Trans

Union because her response letter informed Baker that Trans Union’s reinvestigation was

underway. 

However, Baker’s allegations are deficient. To the extent the claim is predicated

on Trans Union’s failure to conduct a reinvestigation, it states no claim because it is

apparent from the above allegations that Trans Union did initiate a reinvestigation upon

receiving notice of Baker’s dispute. Furthermore, Baker has not alleged that Trans Union

neglected to provide her with written notice of the results of the reinvestigation or a

revised consumer report based on her consumer file after the reinvestigation. The only

relevant allegation is that Trans Union failed to correct some of the inaccuracies

subsequent to the reinvestigation. This vague contention is insufficient to state a claim

because it fails to specify exactly what inaccurate information Trans Union failed to

correct. Baker refers to a Barclays Bank account in her Response, but no such reference

is made in the Complaint itself. Furthermore, the claim suffers the same deficiency with

respect to actual damages as does the § 1681e(b) claim. Because the deficiencies can be

cured, however, the claim will be dismissed with leave to amend.

B. TU Interactive

1. 15 U.S.C. § 1681b

According to the Complaint, TU Interactive violated § 1681b because it “willfully

and negligently obtained Baker’s credit data” from Trans Union despite having “no

permissible purpose” to do so. Section 1681b(f) prohibits a person from obtaining a

consumer report for purposes other than those outlined in § 1681b(a). As already

explained, Trans Union’s release of Baker’s consumer report to TU Interactive was

permissible because TU Interactive is allegedly a reseller of credit information. If TU’s

purpose for releasing the information was permissible, so was TU Interactive’s purpose in

obtaining it. Moreover, as also explained, TU Interactive is exempt from the permissible

purpose requirements of § 1681b to the extent it is owned and/or operated by Trans

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 10 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 11 -

Union. Baker’s § 1681b claim against TU Interactive is therefore incurably deficient and

will be dismissed without leave to amend.

2. 15 U.S.C. § 1681g

Baker also alleges that TU Interactive “willfully and negligently sold incomplete

consumer disclosures” in violation of § 1681g, which, as mentioned, requires all

consumer reporting agencies to clearly and accurately disclose to the consumer, upon

request, all information in the consumer’s “file,” sources of the information, the identities

of certain recipients of the consumer’s “consumer report,” and other credit-related

information outlined in the provision. See 15 U.S.C. § 1681g(a).

Nowhere in the Complaint does Baker allege that she ordered and obtained an

incomplete consumer disclosure from TU Interactive. She alleges only that the consumer

report she received from TU Interactive failed to disclose the estimated deletion dates for

“derogatory data” and failed to include promotional and account review credit inquiries. 

As explained supra, consumer reports are distinct from consumer disclosures. Because

Baker’s § 1681g claim is again premised on a misunderstanding of the relationship

between the two, the claim will be dismissed without leave to amend. 

C. Verifacts, Stacy Aull & Jane Doe

1. 15 U.S.C. § 1681b

Baker alleges that Verifacts “willfully and negligently obtained Baker’s Trans

Union credit data” in violation of § 1681b, which prohibits a person from obtaining a

consumer report for purposes other than those outlined in § 1681b(a). 15 U.S.C. §

1681b(f). As discussed earlier with respect to Baker’s § 1681b claim against Trans

Union, persons who intend to use credit information to collect a debt owed by the

consumer have a permissible purpose in acquiring the information from consumer

reporting agencies. See id. § 1681b(a)(3)(A) (“review or collection of an account” is a

permissible purpose). Because skip-tracers are in the business of locating debtors to

facilitate the collection of debts by creditors, their practices fall within the scope of

permissible purposes under § 1681b(a)(3)(A). Therefore, Baker’s § 1681b claim against

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 11 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 12 -

Verifacts will be dismissed without leave to amend.

2. FDCPA

The FDCPA regulates the conduct of debt collectors. Verifacts, Stacy Aull, and

Jane Doe argue that Baker has failed to state a claim under the FDCPA because Verifacts

is not a debt collector subject to FDCPA requirements. Although a close question, the

Court concludes that Verifacts does fall within the definition of “debt collector” and

therefore is subject to the FDCPA. 

The purposes of the FDCPA are “to eliminate abusive debt collection practices by

debt collectors, to insure that those debt collectors who refrain from using abusive debt

collection practices are not competitively disadvantaged, and to promote consistent State

action to protect consumers against debt collection abuses.” 15 U.S.C. § 1692(e). The

term “debt collector” is defined as:

[A]ny person who uses any instrumentality of interstate commerce or the mails

in any business the principal purpose of which is the collection of any debts,

or who regularly collects or attempts to collect, directly or indirectly, debts

owed or due or asserted to be owed or due another.

Id. § 1692a(6). An entity must therefore comply with the FDCPA if it (1) is principally in

the business of debt collection or (2) regularly attempts to collect debts, either directly or

indirectly. See Romine v. Diversified Collection Servs., Inc., 155 F.3d 1142, 1145 (9th

Cir. 1998). 

The Ninth Circuit has explained that a determination of whether an entity falls

within the definition of “debt collector” for purposes of the FDCPA depends not on the

entity’s organizational label, but rather on the nature of its activities. See Romine, 155

F.3d at 1149. In Romine, the court found the FDCPA applicable to an entity in the

business of providing Automated Voice Telegram (“AVT”) service, through which it

obtains debtors’ telephone numbers by eliciting responses to personal delivery telegrams

and then communicates the numbers to creditors and collection agencies. Id. at 1143,

1149. After breaking down the definition of “debt collector” into its two prongs, the

court looked to whether the entity’s activities amounted to a direct or indirect attempt to

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 12 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 13 -

collect a debt. Id. at 1145. Noting that the entity advertised its AVT service as “specially

developed for the credit and collections industry,” that it obtained telephone numbers

specifically for creditors and collectors through deceptive means, and that it used the

urgency of telegrams to “catalyze debt collection,” the court determined that the entity’s

activities went “beyond mere information gathering or message delivery” and were “of

the type that the FDCPA was designed to deter.” Id. at 1147, 1149. In response to the

entity’s argument that the court’s ruling would “bring a host of service providers within

the statute’s reach, including mailing services, private investigators, skip tracers, online

personal locator services, and other services that aid or facilitate the collections process,”

the court expressly declined to decide whether those service providers are considered debt

collectors and merely reiterated its conclusion that such a determination “would depend

upon the nature of the activities in the individual case.” Id. at 1149 (emphasis added).

As a skip-tracer, Verifacts is not engaged in a business the principal purpose of

which is the collection of debt because it merely gathers location information for use by

the collections industry. It has no direct interest in the debt to be collected. See id. at

1145 (debt collection was not the principal purpose of the entity at issue because it merely

obtained debtors’ contact information). Therefore, Verifacts is not a “debt collector”

under the first prong of the definition. Whether it qualifies as a “debt collector” under the

second prong, however, is a closer question. 

On the one hand, Verifacts advertises itself as an entity that “provid[es] the

credit/collections industry with high quality location information” partly through “expert

phone inquiry.” Because seeking out a debtor’s current location furnishes an

indispensable link in the debt collection process, Verifacts’ system of telephone inquiry

may be construed as indirect debt collection. Moreover, telephone practices are within

the realm of debt collection practices sought to be regulated by the FDCPA. See 15

U.S.C. § 1692d (abusive practices include “[c]ausing a telephone to ring or engaging any

person in telephone conversation repeatedly or continuously with intent to annoy, abuse,

or harass any person . . . .”). A policy of prohibiting debt collection agencies from

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 13 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 14 -

engaging in abusive telephone practices while allowing skip-tracers to do so is

questionable. 

On the other hand, it is difficult to see how Verifacts’ alleged conduct surpasses

the “mere information gathering” implicitly deemed insufficient by the Ninth Circuit to

bring an entity within the FDCPA’s coverage. The AVT service at issue in Romine was

grounded in blatant deception–it used the urgency of a voice telegram to induce the

plaintiff to call in and provide his contact information in order to retrieve the “telegram,”

which amounted to no more than a pre-recorded message from a debt collection agency. 

155 F.3d at 1144. In contrast, Jane Doe at Verifacts merely telephoned Baker and asked

for her address outright. Though she did not immediately disclose the purpose of the

inquiry, she did so when Baker prompted her for it. No deception was involved. 

On balance, because Verifacts’ alleged conduct appears to be no more than “mere

information gathering,” at least in this case, the Court concludes as a matter of law that it

is not a “debt collector” for purposes of the FDCPA. At least two district courts have

reached a similar conclusion. See Campbell v. Triad Fin. Corp., No. 5:07-CV-579, 2007

WL 2973598, at *9, 2007 U.S. Dist. LEXIS 77623, at *26-27 (N.D. Ohio Oct. 9, 2007);

Goldstein v. Chrysler Fin. Co., 276 F. Supp. 2d 687, 690 (E.D. Mich. 2003). 

Though the claims may theoretically be cured by alleging additional facts

indicating that Verifacts’ conduct exceeded the scope of mere information gathering,

allowing Baker to amend the Complaint would be futile because none of her rather

specific allegations even remotely reflects conduct that goes beyond mere information

gathering. As such, the claims are dismissed without leave to amend.

D. Attorneys’ Fees

Though 15 U.S.C. §§ 1681n(a)(3), 1681o(a)(2), and 1692k allow a prevailing

plaintiff to recover reasonable attorneys’ fees for violations of the FCRA and the FDCPA,

the provisions do not apply to pro se plaintiffs. See Burns v. Bank of Am., 655 F. Supp.

2d 240, 253 (S.D.N.Y. 2008); cf. Kay v. Ehrler, 499 U.S. 432, 438 (1991) (pro se

plaintiffs, regardless of whether they are attorneys, cannot recover attorneys’ fees under

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 14 of 15
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

- 15 -

42 U.S.C. § 1988 because allowing them to do so “would create a disincentive to employ

counsel” and “[t]he statutory policy of furthering the successful prosecution of

meritorious claims is better served by a rule that creates an incentive to retain

counsel . . . .”). Because Baker is pro se, she cannot recover attorneys’ fees under the

FCRA and the FDCPA.

IT IS THEREFORE ORDERED that Defendants Trans Union LLC and Trans

Union Interactive Inc.’s Motion to Dismiss (doc. # 4) is granted. With respect to Trans

Union LLC, the Motion is granted without leave to amend as to the claims under 15

U.S.C. §§ 1681b, 1681e(a), and 1681g and granted with leave to amend until June 7,

2010, as to the claims under 15 U.S.C. §§ 1681e(b) and 1681i. With respect to Trans

Union Interactive Inc., the Motion is granted as to all claims without leave to amend. 

IT IS FURTHER ORDERED that Defendants Verifacts Inc., Stacy Aull, and Jane

Doe’s Motion to Dismiss (doc. # 10) is granted as to all claims without leave to amend.

IT IS FURTHER ORDERED that the Clerk enter judgment dismissing this action

with prejudice after June 7, 2010, if Plaintiff does not file an amended complaint by June

7, 2010.

DATED this 25th day of May, 2010.

Case 3:10-cv-08038-NVW Document 24 Filed 05/25/10 Page 15 of 15