2010 U.S. Dist. LEXIS 51425, *

Christine Baker, Plaintiff, vs. Trans Union LLC; Trans Union Interactive Inc.; Verifacts Inc.; 

Stacy Aull; Jane Doe, Defendants. 

No. CV-10-8038-PCT-NVW 

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA 

2010 U.S. Dist. LEXIS 51425 

May 25, 2010, Decided 

May 25, 2010, Filed 

COUNSEL: [*1] Christine Baker, Plaintiff, Pro se, Kingman, AZ. 

For Trans Union, LLC, Defendant: Philip R Wooten , Philip R Wooten PC, Phoenix, AZ; 

Tiffany L Cox , Strasburger & Price LLP, Frisco, TX. 

JUDGES: Neil V. Wake , United States District Judge. 

OPINION BY: Neil V. Wake 

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 

Switch Client | Preferences | Help | Sign Out

FOCUSTM Terms Advanced... Get a Document View 

Tutorial

Service: Get by LEXSEE®

Citation: 2010 U.S. Dist. Lexis 51425

CORE TERMS: consumer, consumer report, collection, reporting, disclosure, collector, leave 

to amend, entity, reinvestigation, negligently, willfully, incorrect, telephone, attorneys' fees, 

inaccurate, reseller, actual damages, disclose, notice, credit report, skip-tracer, gathering, 

telegram, furnish, collection agencies, fails to comply, indirectly, disputed, abusive, intend

TM ®

OPINION

My Lexis Search Get a Document Shepard's More History

Alerts

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 1 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 1 of 10
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, 173 L. Ed. 2d 868 (2009)

(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 

(2007)). A claim is plausible if it contains [*2] sufficient factual matter to permit a reasonable 

inference that the 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 [*3] 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 

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 [*4] 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 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 2 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 2 of 10
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, [*5] 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. 

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 [*6] 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 [*7] 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 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)(A)(ii) (excluding from the definition of "consumer 

report" any communication of consumer information "among persons related by common 

ownership or affiliated by corporate control"). 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 3 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 3 of 10
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 

[*8] 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. BronxWestchester 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 [*9] § 1681e(a) by "willfully and negligently fail

[ing] to maintain reasonable procedures to avoid violations of § 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 [*10] 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 U.S. Dist. LEXIS 93266, at *13-14, 2008 WL 4838714, at *5 (D. Ariz. Nov. 5, 2008); 

Valentine v. First Advantage SafeRent, Inc., No. EDCV 08-142-VAP (JCRx), 2008 U.S. Dist. 

LEXIS 80764, at *4-5, 2008 WL 4367353, at *2 (C.D. Cal. Sept. 23, 2008). [*11] 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 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 4 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 4 of 10
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. BEH-1, 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 [*12] 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 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 [*13] 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 [*14] 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, 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 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 5 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 5 of 10
end of the 30-day period beginning on the date on which the agency receives the 

notice of the dispute [*15] 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 [*16] 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 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 [*17] 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

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 6 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 6 of 10
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 [*18] "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 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 [*19] 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) [*20] ("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 

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: 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 7 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 7 of 10
[A]ny person who uses any instrumentality of interstate commerce or the mails in 

[*21] 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 [*22] entity's 

activities amounted to a direct or indirect attempt to 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 [*23] 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, [*24] or harass any person . . . ."). A policy of prohibiting debt 

collection agencies from 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. 

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 8 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 8 of 10
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 [*25] have reached a similar 

conclusion. See Campbell v. Triad Fin. Corp., No. 5:07-CV-579, 2007 U.S. Dist. LEXIS 77623, 

at *26-27, 2007 WL 2973598, at *9 (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, 111 S. Ct. 1435, 113 L. Ed. 2d 486 (1991) (pro se 

plaintiffs, regardless of whether they are attorneys, cannot recover attorneys' fees under 42 

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

and "[t]he statutory [*26] 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. 

/s/ Neil V. Wake 

Neil V. Wake 

United States District Judge 

Service: Get by LEXSEE®

Citation: 2010 U.S. Dist. Lexis 51425

View: Full

Date/Time: Tuesday, November 22, 2011 - 6:56 PM EST

* Signal Legend:

 - Warning: Negative treatment is indicated

 - Questioned: Validity questioned by citing refs

 - Caution: Possible negative treatment

 - Positive treatment is indicated

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 9 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 9 of 10
ln

 - Citing Refs. With Analysis Available

 - Citation information available

* Click on any Shepard's signal to Shepardize® that case.

About LexisNexis | Privacy Policy | Terms & Conditions | Contact Us 

Copyright © 2011 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.

Get a Document - by Citation - 2010 U.S. Dist. LEXIS 51425 Page 10 of 10

https://www.lexis.com/research/retrieve?_m=87776d04ed0d86fd1e8769892b87d668&cs... 11/22/2011

Case 1:11-cv-02430-WYD-KMT Document 11-2 Filed 11/22/11 USDC Colorado Page 10 of

 10