Court Opinion

ID: 5139617
Source: CourtListenerOpinion
Date Created: 2021-12-22 16:01:01.425031+00
Date Added: 2024-06-11T08:24:18.799123
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 21‐1037
BROOKE PERSINGER,
                                                  Plaintiff‐Appellant,
                                 v.

SOUTHWEST CREDIT SYSTEMS, L.P.,
                                                 Defendant‐Appellee.
                     ____________________

         Appeal from the United States District Court for the
         Southern District of Indiana, Indianapolis Division.
            No. 19‐cv‐00853 — Richard L. Young, Judge.
                     ____________________

  ARGUED OCTOBER 27, 2021 — DECIDED DECEMBER 22, 2021
               ____________________

   Before MANION, WOOD, and BRENNAN, Circuit Judges.
    BRENNAN, Circuit Judge. In 2017, a bankruptcy court dis‐
charged Brooke Persinger’s debts. A few months later, South‐
west Credit Systems began collection eﬀorts on a pre‐petition
debt of Persinger’s, including by acquiring a type of credit in‐
formation called her “propensity‐to‐pay score.” Alleging that
this information had been secured without a permissible pur‐
pose, Persinger sued Southwest under the Fair Credit Report‐
ing Act (“FCRA”), 15 U.S.C. § 1681 et seq. The district court
2                                                 No. 21‐1037

granted summary judgment to Southwest, holding that
Southwest’s compliance procedures were reasonable and
thus met the FCRA’s requirements. For the reasons that fol‐
low, we aﬃrm.
                               I
   Persinger and her husband jointly filed for bankruptcy in
2017. Their bankruptcy petition listed each creditor to which
they individually, or jointly, owed a debt. One such creditor
was Southwest, who was servicing an AT&T debt incurred by
Persinger’s husband in 2014. This was the only debt for which
Southwest was listed as a creditor.
    The bankruptcy court ordered a discharge of the Persing‐
ers’ debts under 11 U.S.C. § 727. The discharge order listed
Brooke Persinger’s four former names, including, as relevant
here, Brooke Casey. Following the discharge order, the bank‐
ruptcy court notified all known creditors, including South‐
west, of its ruling.
    When Southwest received this notice, it scanned its system
for aﬀected accounts. Per company policy, Southwest closes
accounts subject to bankruptcy. But by the time Southwest re‐
ceived notice of the Persingers’ 2017 bankruptcy, it had al‐
ready closed the AT&T account.
   Bankruptcy notices are not the only way Southwest learns
about discharged debts. Upon receiving a new account,
Southwest orders a “bankruptcy scrub” from LexisNexis—a
process by which LexisNexis searches for bankruptcy infor‐
mation connected to that account. If matching bankruptcy
data is discovered, it is immediately returned to Southwest. If
no immediate match is discovered, LexisNexis stores the ac‐
count information, continuously searches for matches, and
No. 21‐1037                                                    3

forwards any bankruptcy data it later finds. As with bank‐
ruptcy notices, if a bankruptcy scrub reveals that an account
is subject to bankruptcy, Southwest closes the account.
    In January 2018, Southwest received a delinquent account
in Brooke Persinger’s former name, Brooke Casey, for a debt
owed to Viasat Residential. This debt, though delinquent
since 2014, was not listed on Persinger’s 2017 bankruptcy pe‐
tition. Southwest, as a matter of course, ordered a bankruptcy
scrub. Because LexisNexis did not immediately return any
bankruptcy results, Southwest proceeded in its collection ef‐
forts.
    To form a collection strategy, Southwest orders a “propen‐
sity‐to‐pay score” from a consumer credit reporting agency.
This is not a full credit report but rather a form of “soft pull”
indicating the likelihood of repayment on a scale of 400 to 800.
Unlike a “hard pull,” a soft pull is not visible to third parties
and does not aﬀect one’s credit score. Because the bankruptcy
scrub did not return any bankruptcy data, Southwest ordered
Persinger’s propensity‐to‐pay score. Several months later,
though, LexisNexis updated Persinger’s account with infor‐
mation about her 2017 bankruptcy. Upon receiving this up‐
date, Southwest closed the account.
   After learning that Southwest accessed her credit infor‐
mation, Persinger filed a class‐action complaint against
Southwest, alleging violations of the FCRA. Following
discovery, the parties filed cross‐motions for summary judg‐
ment; the district court granted Southwest’s motion and de‐
nied Persinger’s motion. On appeal, Persinger challenges the
grant of summary judgment to Southwest.
4                                                    No. 21‐1037

                                II
    Before proceeding to the merits, we must answer the juris‐
dictional question of whether Persinger has standing to sue.
Although the district court did not address Southwest’s argu‐
ment that Persinger lacked standing, we have an “independ‐
ent obligation” to inspect, and remain within, jurisdictional
boundaries. Bazile v. Fin. Sys. of Green Bay, Inc., 983 F.3d 274,
281 (7th Cir. 2020) (quoting Henderson ex rel. Henderson v.
Shinseki, 562 U.S. 428, 434 (2011)). “The Article III standing in‐
quiry remains open to review at all stages of the litigation.”
Pennell v. Glob. Tr. Mgmt., LLC, 990 F.3d 1041, 1044 (7th Cir.
2021) (internal quotation marks omitted). But the plaintiﬀ’s
“burden to demonstrate standing changes as the procedural
posture of the litigation changes.” Gracia v. SigmaTron Intʹl,
Inc., 986 F.3d 1058, 1063 (7th Cir. 2021). Where, as here, the
procedural posture is summary judgment, the plaintiﬀ must
“set forth by aﬃdavit or other evidence specific facts, which
for purposes of the summary judgment motion will be taken
to be true.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)
(internal quotation marks omitted).
    Federal jurisdiction “extends only to ‘Cases’ and ‘Contro‐
versies.’” Spokeo, Inc. v. Robins, 578 U.S. 330, 337 (2016) (quot‐
ing U.S. CONST. art. III, § 2). Standing doctrine enforces this
limitation by ensuring that courts only adjudicate disputes in
which the plaintiﬀ has a “personal stake.” TransUnion LLC v.
Ramirez, 141 S. Ct. 2190, 2203 (2021). Standing consists of three
elements: injury in fact, causation, and redressability. Lujan,
504 U.S. at 560–61. This case concerns the first element—in‐
jury in fact—which means the injury must be both “concrete
and particularized,” and “actual or imminent, not conjectural
or hypothetical.” Id. at 560 (internal quotation marks omitted).
No. 21‐1037                                                     5

    For an injury to be concrete, it must be “real, and not
abstract.” Spokeo, 578 U.S. at 340 (internal quotation marks
omitted). Tangible harms, like physical or monetary harms,
“readily qualify as concrete injuries.” Ramirez, 141 S. Ct. at
2204. Intangible harms may also be concrete, for example,
“reputational harms, disclosure of private information … in‐
trusion upon seclusion[,] … [a]nd those traditional harms …
specified by the Constitution itself.” Id. In determining
whether a harm is concrete, “history and tradition oﬀer a
meaningful guide.” Sprint Commc’ns Co. v. APCC Servs., Inc.,
554 U.S. 269, 274 (2008). “[C]ourts should assess whether the
alleged injury to the plaintiﬀ has a ‘close relationship’ to a
harm ‘traditionally’ recognized as providing a basis for a law‐
suit in American courts.” Ramirez, 141 S. Ct. at 2204 (quoting
Spokeo, 578 U.S. at 341).
    When it comes to identifying concrete harms, Congress’s
judgment is important. But even if Congress imposes a “stat‐
utory prohibition or obligation and a cause of action,” courts
must still “independently decide whether a plaintiﬀ has suf‐
fered a concrete harm under Article III.” Id. at 2205. “[U]nder
Article III, an injury in law is not an injury in fact. Only those
plaintiﬀs who have been concretely harmed by a defendant’s
statutory violation may sue that private defendant over that
violation in federal court.” Id.
    The FCRA imposes statutory prohibitions and obligations,
including that a person shall not use or obtain a consumer re‐
port without a permissible purpose. 15 U.S.C. § 1681b(f). The
Act also provides a cause of action for negligent and willful
violations. 15 U.S.C. §§ 1681n–o. Persinger asserts that South‐
west violated § 1681b(f), causing her harm. This is not enough
6                                                   No. 21‐1037

on its own to confer standing. We must decide whether this
harm qualifies as a concrete injury.
    When reviewing potential injuries for standing purposes,
we are constrained by the operative complaint. Pennell, 990
F.3d at 1045. Persinger’s complaint alleged “financial and dig‐
nitary harm … and an injury to her credit rating and reputa‐
tion.”
    Persinger’s deposition testimony illuminated these allega‐
tions. Southwest’s counsel asked Persinger how she was
harmed by Southwest’s inquiry into her propensity‐to‐pay
score. She responded, “Harmed? I mean, there’s stress on it,
yes.” Probing for more, counsel asked her if she had been
harmed in any other way. She added, “My personal privacy.”
To confirm, counsel asked if any she had experienced any
harm besides “personal privacy and stress.” Persinger an‐
swered, “No, sir.”
    Prompted by Southwest’s counsel, Persinger clarified
what she meant by harm to her “personal privacy,” explain‐
ing: “My consumer report is for me and for the people that I
allow to look things up in, not for people that I didn’t sign off
for, didn’t give them permission to do.” When asked if South‐
west’s access angered her, Persinger responded “yes.”1
   Next, Southwest’s counsel questioned Persinger about
any harms she may have suffered, making certain that Per‐
singer experienced only “stress” and an infringement of per‐
sonal privacy, congruent with her earlier answer. He asked
her if Southwest’s inquiry affected her ability to get a job; she
confirmed it did not. She gave the same response regarding

    1   See R. 101‐1 at 58:14–59:20.
No. 21‐1037                                                    7

her ability to obtain loans or credit cards—Persinger stated it
was not affected. Counsel continued: “You haven’t lost any
money because of Southwest Credit’s inquiry on your credit
report, have you?” Persinger replied, “Not to my acknowl‐
edgement.” Pressing on, counsel then asked Persinger
whether she had been denied housing, credit, employment,
or insurance. Persinger answered in the negative to each. In
summary, Southwest’s counsel asked: “So really the only way
Southwest Credit report’s inquiry has affected you that you
know of is it was essentially an invasion of your privacy; is
that correct? Persinger answered, “Yes.”2
    Persinger’s deposition testimony undercuts her allega‐
tions of financial, credit, and reputational injuries. To begin,
she affirmatively represented that the only injury she suffered
was an invasion of privacy—though she initially named stress
too. Beyond this, she explicitly disclaimed loss of money,
housing, employment, or insurance (financial harms) and loss
of credit (credit harm). Persinger’s deposition provided no in‐
formation supporting the existence of reputational harm, and
she does not point us to anything else in the record support‐
ing this claim. So, that leaves us with dignitary harm as the
only allegation in Persinger’s complaint that might qualify as
a concrete injury.
    But what did Persinger mean by dignitary harm? Her
deposition testimony and interrogatory responses supply two
options: stress and privacy harm. Even if stress can be fairly
labeled a dignitary harm, it is not a concrete injury. Wadsworth
v. Kross, Lieberman & Stone, Inc., 12 F.4th 665, 668–69 (7th Cir.
2021). A privacy harm, on the other hand, might be concrete,

   2   See R. 101‐1 at 60:25–61:2; 66:10–68:1.
8                                                      No. 21‐1037

and it is a form of dignitary harm. See Dignitary, BLACK’S LAW
DICTIONARY (11th ed. 2019). Importantly, it is the only eligible
harm for standing purposes—one that is both grounded in the
complaint and uncontradicted by the record. Closer examina‐
tion is necessary to determine whether this privacy harm is a
concrete injury under Article III.
    Under Spokeo, Inc. v. Robins and TransUnion LLC v.
Ramirez, to determine whether a harm is concrete, we look to
both history and Congress’s judgment. Gadelhak v. AT&T
Servs., Inc., 950 F.3d 458, 462 (7th Cir. 2020), cert. denied, 141 S.
Ct. 2552 (2021).
    Starting with history, courts look for a common law
analog to determine whether an alleged injury has “a close
relationship to a harm traditionally recognized as providing
a basis for lawsuits in American courts.” Ramirez, 141 S. Ct. at
2204. Persinger used the phrase “invasion of privacy,” but we
must look behind this allegation to determine whether the
challenged conduct bears a “close relationship” to the tort.
According to Persinger, Southwest violated the FCRA by ob‐
taining her credit information without a permissible purpose.
The next step is to pair this alleged violation—and the alleged
harm—to a common law analog, assessing whether a close re‐
lationship exists.
    Traditionally, the tort of invasion of privacy encompassed
four theories of wrongdoing: intrusion upon seclusion, ap‐
propriation of a person’s name or likeness, publicity given to
private life, and publicity placing a person in a false light. See
RESTATEMENT (SECOND) OF TORTS §§ 652A–652E (AM. L. INST.
1977). For this case, intrusion upon seclusion is the best com‐
parator, which occurs when a person “intrudes … upon the
solitude or seclusion of another or his private affairs or
No. 21‐1037                                                                9

concerns” and this “intrusion would be highly offensive to a
reasonable person.” Id. § 652B. For example, an intrusion
upon seclusion may be committed “by opening [a person’s]
private and personal mail, searching his safe or his wallet, [or]
examining his private bank account.” Id. § 652B cmt. b.
    An unauthorized inquiry into a consumer’s propensity‐to‐
pay score is analogous to the unlawful inspection of one’s
mail, wallet, or bank account. To be sure, a propensity‐to‐pay
score is a number—distilled from a consumer’s financial his‐
tory—indicating likelihood of repayment. In that sense, it pro‐
vides less information to a debt collection agency than a full
credit report would provide. Nevertheless, Spokeo and
Ramirez make clear our responsibility to look for a close rela‐
tionship “in kind, not degree.” See Gadelhak, 950 F.3d at 462.
Whether Persinger would prevail in a lawsuit for common
law invasion of privacy is irrelevant.3 It is enough to say that
the harm alleged in her complaint resembles the harm associ‐
ated with intrusion upon seclusion. See id. at 462–63. Thus, it

    3 At oral argument, Southwest’s counsel urged us to apply the ele‐
ments of intrusion upon seclusion, arguing that Persinger’s injury falls
short of being highly offensive to a reasonable person—one of the tort’s
elements. Oral Argument at 11:30–12:43. Counsel was correct about intru‐
sion upon seclusion’s elements, see RESTATEMENT (SECOND) OF TORTS
§ 652B, but under Ramirez, we do not look for an “exact duplicate,” we
look for a “close relationship.” Ramirez, 141 S. Ct. at 2209. In Ramirez, the
Supreme Court referenced defamation’s “essential” element of publica‐
tion not to apply, in full, the elements of defamation, but to explain why
defamation failed as an analogy for those plaintiffs whose inaccurate in‐
formation had not been shared. See id. at 2209–10. In sum, once we identify
a tort analog, our role ends. And here, the tort analog is intrusion upon
seclusion. Whether unauthorized procurement of a propensity‐to‐pay
score is “highly offensive,” moderately offensive, or slightly offensive is
not before us.
10                                                    No. 21‐1037

is a concrete injury. Cf. Fox v. Dakkota Integrated Sys., LLC, 980
F.3d 1146, 1155–56 (7th Cir. 2020) (holding that an alleged vi‐
olation of Illinois’s Biometric Information Privacy Act consti‐
tuted a concrete injury because the unauthorized collection of
biometric data was analogous to an invasion of privacy);
Gadelhak, 950 F.3d at 462–63 (analogizing to intrusion upon
seclusion and ruling that receiving “unwanted text messages
can constitute a concrete injury‐in‐fact”).
    Congress’s judgment supports our view. Although “Con‐
gress cannot transform a non‐injury into an injury on its say‐
so,” Gadelhak, 950 F.3d at 462, the FCRA’s protection of
consumer credit information is akin to the common law’s pro‐
tection of private information through the tort of invasion of
privacy. To safeguard consumer credit information, Congress
drafted § 1681b, which makes it unlawful to furnish, obtain,
or use a consumer’s credit information without a permissible
purpose. In doing so, Congress created a federal cause of ac‐
tion for a common‐law‐like harm; it did not attempt to “enact
an injury into existence.” Ramirez, 141 S. Ct. at 2205 (quoting
Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018)).
    This conclusion fits well with our recent decision in Crab‐
tree v. Experian Info. Sols., Inc., 948 F.3d 872 (7th Cir. 2020). In
Crabtree, as here, the plaintiff alleged a § 1681b violation. See
id. at 875. The defendant claimed, as its permissible purpose
for disclosing the plaintiff’s credit information, the provision
of the FCRA allowing a consumer reporting agency to dis‐
close credit information without consumer initiation if the
disclosure results in a “firm offer of credit or insurance.” Id.
at 875; 15 U.S.C. § 1681b(c)(1)(B)(i). Because the plaintiff con‐
ceded he likely received a firm offer of credit, he failed to ar‐
ticulate a concrete harm. Crabtree, 948 F.3d at 879.
No. 21‐1037                                                    11

    Even though Crabtree held that the plaintiff lacked stand‐
ing, it made clear that some FCRA violations may qualify as
concrete harms. Id. at 879–80. This observation followed from
the Supreme Court’s recognition of a “right to privacy that
‘encompass[es] the individual’s control of information con‐
cerning his or her person,’” id. (quoting U.S. Depʹt of Justice v.
Reporters Comm. for Freedom of Press, 489 U.S. 749, 763 (1989)),
and Congress’s decision to protect this right in the FCRA. Id.
Additionally, Crabtree noted our previous recognition of a
consumer’s right to privacy in credit information. See Cole v.
U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004) (holding that a
plaintiff stated a claim under § 1681b when her credit infor‐
mation was shared but no firm offer of credit was extended).
Under these principles, Crabtree correctly observed that a
§ 1681b violation may qualify as a concrete harm. This is such
a case.
    Looking to other federal courts of appeals, our reasoning
comports with that of the Ninth Circuit, which recently held
that a § 1681b(f) violation was a concrete injury. In Nayab v.
Capital One Bank, 942 F.3d 480 (9th Cir. 2019), that court relied
on circuit precedent, the common law analog of intrusion
upon seclusion, and Congress’s judgment to decide that the
plaintiff’s allegations of a § 1681b(f) violation supported
standing. Id. at 489–93. We agree with its assessment of his‐
tory and Congress’s judgment. Particularly, the court con‐
cluded, as we do, that “[t]he harm attending a violation of
§ 1681b(f)(1) of the FCRA is closely related to—if not the same
as—a harm that has traditionally been regarded as providing
a basis for a lawsuit: intrusion upon seclusion (one form of the
tort of invasion of privacy).” Id. at 491. And it noted that the
FCRA’s declared purpose of “insur[ing] that consumer re‐
porting agencies exercise their grave responsibilities with
12                                                No. 21‐1037

fairness, impartiality, and a respect for the consumer’s right
to privacy” evidenced Congress’s judgment. Id. at 492
    To sum up, history and precedent compel a simple result:
Persinger has standing to sue. She testified that Southwest in‐
vaded her privacy when it reviewed her credit information.
Under Spokeo and Ramirez, this is a concrete injury because it
is analogous to the common law tort of intrusion upon seclu‐
sion. Thus, Persinger has standing to seek damages under 15
U.S.C. §§ 1681n–o.
                              III
   Now we turn to the merits. We review the district court’s
summary‐judgment order de novo and construe the record in
the light most favorable to Persinger—the nonmoving party.
James v. Hale, 959 F.3d 307, 314 (7th Cir. 2020).
    In 1970, the FCRA became law “to ensure fair and accurate
credit reporting, promote efficiency in the banking system,
and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47, 52 (2007). Sharing credit information, “though
often necessary in the modern economy, can result in a signif‐
icant invasion of privacy and can jeopardize a consumer’s
personal, reputational, and financial well‐being.” Rodriguez v.
Sprint/United Mgmt. Co., 163 F. Supp. 3d 529, 533 (N.D. Ill.
2016).
    To safeguard these interests, the FCRA provides a private
right of action for injured consumers. Safeco, 551 U.S. at 53;
TRW Inc. v. Andrews, 534 U.S. 19, 23 (2001). A negligent viola‐
tion entitles a consumer to actual damages. 15 U.S.C.
§ 1681o(a). A willful violation entitles a consumer to actual
damages or statutory damages, with punitive damages left to
No. 21‐1037                                                   13

the court’s discretion. 15 U.S.C. § 1681n(a). Persinger ad‐
vances both a negligence theory and a willfulness theory.
                               A
    To prove a negligent violation of the FCRA, a plaintiff
must establish “actual damages.” 15 U.S.C. § 1681o(a)(1); Ruf‐
fin‐Thompkins v. Experian Info. Sols., Inc., 422 F.3d 603, 607–08
(7th Cir. 2005). Actual damages require a “causal relation” be‐
tween the statutory violation and the harm suffered by the
plaintiff. Aldaco v. RentGrow, Inc., 921 F.3d 685, 689 (7th Cir.
2019) (quoting Crabill v. Trans Union, L.L.C., 259 F.3d 662, 664
(7th Cir. 2001)).
    An FCRA violation may inflict pecuniary harm, like lost
income or out‐of‐pocket expenses caused by denials of credit,
housing, or insurance. Id. at 689–90 (recognizing the possibil‐
ity that an FCRA violation may cause denial of housing but
holding that the plaintiff failed to establish causation); Robin‐
son v. Equifax Info. Servs., LLC, 560 F.3d 235, 241 n.2 (4th Cir.
2009) (identifying loss of income as a cognizable form of ac‐
tual damages); Crabill, 259 F.3d at 664 (noting that “loss of
credit” may support actual damages); Millstone v. OʹHanlon
Reps., Inc., 528 F.2d 829, 831 (8th Cir. 1976) (affirming award
of actual damages after an inaccurate report caused tempo‐
rary denial of insurance).
    Nonpecuniary harms, including reputational damage and
emotional distress, may also follow an FCRA violation,
though these harms must be described in “reasonable de‐
tail”—conclusory statements are insufficient. See Ruffin‐
Thompkins, 422 F.3d at 610; see also Robinson, 560 F.3d at 241
(holding that plaintiff provided sufficient proof of emotional
distress caused by FCRA violation); Konter v. CSC Credit
Servs., Inc., 606 F. Supp. 2d 960, 969 (W.D. Wis. 2009)
14                                                 No. 21‐1037

(concluding that plaintiff failed to establish a causal link be‐
tween FCRA violation and emotional distress). However the
plaintiff frames her case, she bears the burden to prove actual
damages, whether pecuniary or nonpecuniary. Ruffin‐Thomp‐
kins, 422 F.3d at 610.
    For Persinger to survive Southwest’s motion for summary
judgment on her negligence theory, she was required to prof‐
fer evidence showing Southwest impermissibly accessed her
propensity‐to‐pay score causing her pecuniary or nonpecuni‐
ary harm. She failed to do so. As to pecuniary harm, she dis‐
avowed any loss of credit, housing, employment, money, or
insurance. When asked if invasion of privacy was the only
harm caused by Southwest’s actions, she answered, “Yes.”
According to Persinger, this invasion of privacy caused her
“stress” and “anger.” But damages for emotional distress
must be proved with more than conclusory statements. Ruf‐
fin‐Thompkins, 422 F.3d at 610. In short, Persinger’s testimony
not only failed to support her claim for actual damages but
also disproved it. With respect to negligence, then, summary
judgment for Southwest was appropriate because no reason‐
able juror could conclude that the inquiry into Persinger’s
propensity‐to‐pay score resulted in actual damages.
                               B
     Even if a plaintiff cannot prove actual damages, she may
still recover statutory or punitive damages by proving that
the defendant willfully violated the FCRA. 15 U.S.C.
§ 1681n(a); Redman v. RadioShack Corp., 768 F.3d 622, 627 (7th
Cir. 2014).
   A willful violation is one committed with actual
knowledge or reckless disregard for the FCRA’s require‐
ments. Safeco, 551 U.S. at 57. A company recklessly violates
No. 21‐1037                                                           15

the FCRA when it commits “a violation under a reasonable
reading of the statute’s terms,” and its erroneous reading
“[runs] a risk of violating the law substantially greater than
the risk associated with a reading that was merely careless.”
Id. at 69; see also Murray v. New Cingular Wireless Servs., Inc.,
523 F.3d 719, 726 (7th Cir. 2008) (discussing and applying
Safeco).
    The Safeco standard raises a sequencing issue. Courts may
pass over the antecedent question of whether a violation oc‐
curred, moving directly to whether the defendant negligently
or willfully violated the statute. See Marino v. Ocwen Loan
Servicing LLC, 978 F.3d 669, 674 (9th Cir. 2020) (discussing se‐
quencing in FCRA cases). This is akin to the sequencing di‐
lemma courts face in qualified immunity cases. Safeco, 551
U.S. at 70 (citing, as analogous, Saucier v. Katz, 533 U.S. 194
(2001)); Marino, 978 F.3d at 674. In Safeco, the Supreme Court
first decided whether a violation occurred, then it turned to
the analysis of mental state. See Safeco, 551 U.S. at 60–70. We
do the same here, as we have in the past. See, e.g., Shlahtichman
v. 1‐800 Contacts, Inc., 615 F.3d 794, 798–804 (7th Cir. 2010) (de‐
ciding whether a violation occurred before assessing mental
state).
                                   1
   The FCRA prohibits consumer credit reporting agencies
from furnishing a “consumer report,”4 except in enumerated

   4 Southwest does not dispute that a propensity‐to‐pay score is a “con‐

sumer report.” By statute, a “consumer report” includes “any written,
oral, or other communication of any information by a consumer reporting
agency bearing on a consumer’s credit worthiness.” 15 U.S.C.
§ 1681a(d)(1). A propensity‐to‐pay score fits this description.
16                                                           No. 21‐1037

circumstances—in other words, when there is a permissible
purpose. 15 U.S.C. § 1681b(a). Relatedly, a person shall not
“use or obtain a consumer report” unless it is obtained for a
permissible purpose. Id. § 1681b(f).
    Persinger claims that Southwest violated § 1681b(f) when
it obtained her propensity‐to‐pay score. As a permissible pur‐
pose, Southwest points to § 1681b(a)(3)(A), which allows a
person to obtain a consumer report if he (1) “intends to use
the information,” (2) “in connection with a credit transac‐
tion,” (3) “involving the consumer on whom the information
is to be furnished,” and (4) “involving the extension of credit
to, or review or collection of an account of, the consumer.” 15
U.S.C. § 1681b(a)(3)(A).
    A premise to Persinger’s argument is that § 1681b(a)(3)(A)
does not apply when a consumer’s debts have been dis‐
charged in bankruptcy. Such an understanding would be too
broad, but this nuance seems to have eluded the parties, as
neither of them discussed the statutory language in their
briefs.5

     5We take this moment to address one other textual matter. For
§ 1681b(a)(3)(A) to qualify as a permissible purpose, there must be a
“credit transaction involving the consumer.” 15 U.S.C. § 1681b(a)(3)(A).
The FCRA defines “credit” to mean “the right granted by a creditor to a
debtor to defer payment of debt or to incur debts and defer its payment or
to purchase property or services and defer payment therefor.” Id.
§§ 1681a(r)(5), 1691a(d). In our view, the plain meaning of “credit transac‐
tion” contemplates an agreement by which the right of deferred payment
is promised in exchange for some form of consideration.
    In this case, the account for which Southwest requested credit infor‐
mation is a debt owed to Viasat Residential. Whether this transaction be‐
tween Persinger and Viasat Residential is a “credit transaction” is unclear
from the record. To the extent this affects Southwest’s ability to claim
No. 21‐1037                                                                17

    The plain meaning of § 1681b(a)(3)(A) does not unambig‐
uously forbid access to credit information relating to an ac‐
count subject to bankruptcy. When a debt‐collection agency
“intends to use” a consumer report “in connection with a
credit transaction involving the consumer on whom the infor‐
mation is to be furnished,” the agency may obtain and use
that report if it also “intends to use” the consumer report to
(1) extend credit to the consumer, (2) review her account, or
(3) collect on her account. See 15 U.S.C. § 1681b(a)(3)(A).
    Persinger focuses on the third option, “collection of an ac‐
count.” Id. § 1681b(a)(3)(A). To the extent Southwest intended
to use Persinger’s credit information to collect on the Viasat
debt, Persinger is right: Southwest would be unable to claim
§ 1681b(a)(3)(A) as a permissible purpose. After all, South‐
west is a debt‐collection agency, and it uses consumer credit
information to form a collection strategy. Because Southwest
does not suggest it had a reason for procuring Persinger’s pro‐
pensity‐to‐pay     score     other    than     for   collection,
§ 1681b(a)(3)(A) provides no justification. To answer the an‐
tecedent question, then, obtaining a propensity‐to‐pay score
for the purpose of collecting on a discharged debt violates the
FCRA, absent another permissible purpose.
    But a bankruptcy’s effect on § 1681b(a)(3)(A) should not
be read too broadly. Indeed, Southwest never concedes that it
always lacks a permissible purpose when a bankruptcy im‐
pacts one of its accounts. In deposition testimony, South‐
west’s officers admitted to having a policy against proceeding

§ 1681b(a)(3)(A) as a permissible purpose, Persinger forfeited her oppor‐
tunity to raise the issue. United States v. Sheth, 924 F.3d 425, 435 (7th Cir.
2019) (“A party forfeits an argument by failing to raise it below, or by rais‐
ing it in a perfunctory or general manner.”).
18                                                                 No. 21‐1037

with collection efforts after it learns that a debt is discharged.
This policy is grounded in practical and legal realities—a dis‐
charged debt cannot be collected (indeed, it is unlawful to
try).6 But Southwest’s Chief Compliance Officer rejected the
idea that bankruptcy made it illegal for Southwest to obtain a
propensity‐to‐pay score altogether, leaving open the possibil‐
ity that, in some instances, the FCRA would still permit
Southwest to procure a consumer report notwithstanding an
underlying bankruptcy.
    We think this interpretation is correct, as do other courts,
which have recognized that § 1681b(a)(3)(A) is not categori‐
cally inapplicable where the underlying debt is discharged or
the underlying account is closed. See Marino, 978 F.3d at 672;
Levine v. World Fin. Network Nat. Bank, 554 F.3d 1314, 1318
(11th Cir. 2009); Banga v. First USA, NA, 29 F. Supp. 3d 1270,
1278 (N.D. Cal. 2014).
    To recap, a firm violates the FCRA when it obtains a con‐
sumer report without a permissible purpose. 15 U.S.C.
§ 1681b(f). One permissible purpose is intending to use credit
information to collect on an account. See id. § 1681b(a)(3)(A).
But this permissible purpose is unavailable when the under‐
lying debt is discharged. Thus, a debt‐collection agency can‐
not claim § 1681b(a)(3)(A) as a permissible purpose if its sole
purpose for accessing a consumer report is collection. Other
reasons, even under § 1681b(a)(3)(A), may still justify obtain‐
ing a consumer report. Here, the record shows that Southwest
intended to collect on the Viasat account, which was subject
to bankruptcy. Accordingly, Southwest’s credit inquiry fell
outside the parameters of § 1681b(a)(3)(A).

     6 See 11 U.S.C. §   524(a); Taggart v. Lorenzen, 139 S. Ct. 1795, 1800 (2019).
No. 21‐1037                                                 19

                              2
    To prevail under § 1681n, Persinger must show that
Southwest not only violated the FCRA but did so willfully.
She points to two predicate actions: Southwest’s handling of
the 2017 bankruptcy notice and Southwest’s bankruptcy
scrub procedure. Viewed as a whole, Southwest’s
procedures—whether for handling bankruptcy notifications
or ordering bankruptcy scrubs—were reasonable compliance
efforts, not willful violations of the FCRA.
    A willful violation is one committed with actual
knowledge or recklessness. Safeco, 551 U.S. at 56–57; Murray,
523 F.3d at 726. Recall that Southwest passively receives noti‐
fications from bankruptcy courts and actively searches for
bankruptcies affecting its open accounts. Persinger argues
these procedures are flawed (to a willfully unlawful extent)
because they failed to reveal her 2017 bankruptcy. It is true
that Persinger’s bankruptcy predated the Viasat debt’s place‐
ment with Southwest. But we must determine whether South‐
west’s failure to reveal her bankruptcy occurred with actual
knowledge or recklessness.
    Starting with the bankruptcy notice, one critical problem
with Persinger’s argument is that she omitted the Viasat debt
from her bankruptcy petition, so the bankruptcy court did not
send a notice to any creditor for that debt. Thus, any lapse in
notification was attributable to Persinger, not Southwest. De‐
spite this, Persinger argues Southwest should have imple‐
mented a procedure for annotating its computer system with
bankruptcy information for application to future accounts.
This theory would require Southwest to retain bankruptcy in‐
formation for consumers that may never have an account
placed with Southwest—more specifically, the debtors listed
20                                                 No. 21‐1037

on the discharge order other than the debtor for which the no‐
tification was sent.
    Persinger apparently expected Southwest not only to look
for the debt listed on the bankruptcy notice—here, Persinger’s
husband’s debt—but also document her name, and all her for‐
mer names, just in case she ever had an account placed with
Southwest. We agree with the district court that this prophy‐
lactic measure is not “reasonable.” In addition to the practical
peculiarities of Persinger’s expectations, Southwest already
implemented a procedure for uncovering bankruptcy data for
future accounts—bankruptcy scrubs. Retaining every bank‐
ruptcy notice would be both inefficient and duplicative of this
bankruptcy scrub process.
    Persinger also attacks the adequacy of Southwest’s bank‐
ruptcy‐scrub procedure. First, Persinger suggests Southwest
receives and logs an explicit “no” answer if LexisNexis does
not find bankruptcy results. Second, she contends Southwest
received a response from LexisNexis before May 22, 2018—
when her account notes reflect a response. These propositions
taken together support Persinger’s theory: If the first is true,
then the second does not matter because either (a) Southwest
received a positive result from LexisNexis on January 4,
2018—reflecting Persinger’s 2017 bankruptcy—and, with
actual knowledge, accessed her credit information, or (b)
Southwest recklessly accessed Persinger’s credit information
because it did not wait for a negative result from LexisNexis
to be posted on the account notes. If the first proposition is
false, then, to demonstrate that Southwest willfully violated
the FCRA, Persinger must show that Southwest received a no‐
tice from LexisNexis of Persinger’s bankruptcy on January 4,
2018, before it procured her credit information.
No. 21‐1037                                                   21

    Persinger’s assertion that Southwest logs a negative result
fails to account for the testimony of Jeff Hazzard, a Southwest
officer, who explained that LexisNexis only returns bank‐
ruptcy information when it receives a “hit.” Southwest’s
Chief Compliance Officer, Katie Zugsay, testified congru‐
ently. In her deposition, she described the bankruptcy scrub
procedure, and its production of a binary (yes or no) but she
never explicitly, or implicitly, testified that LexisNexis gener‐
ates a “no” that gets logged on the consumer’s account. The
record shows, without dispute, that only positive bankruptcy
scrub results are returned.
    As to timing, Persinger contends that Southwest received
notice of her bankruptcy on January 4, 2018—before South‐
west obtained her propensity‐to‐pay score—not May 22, 2018,
the date Persinger’s account notes reflect receipt. If true, this
would demonstrate actual knowledge, and by extension, will‐
fulness. To support her argument, Persinger turns to Zugsay’s
deposition testimony. But this testimony does not assist Per‐
singer. In qualified language—riddled with phrases like “I be‐
lieve” and “[i]t is my understanding”—Zugsay described her
understanding that Southwest received results before the
date reflected on the account notes. Rather than demonstrat‐
ing that Southwest must have received notice of Persinger’s
bankruptcy before it procured her propensity‐to‐pay score,
this testimony merely reinforces Hazzard’s testimony that
only positive bankruptcy‐scrub results are logged, not nega‐
tive results. Hazzard’s testimony explained that a functional
“no” from LexisNexis (not receiving a bankruptcy report)
greenlights collection efforts but this “no” does not appear on
account notes. This is what happened here. Southwest or‐
dered a bankruptcy scrub, received no results, and continued
to collect on the debt. Months later, it received additional
22                                                            No. 21‐1037

information from LexisNexis relating to Persinger’s bank‐
ruptcy and shut down the account.
    In sum, there is no genuine dispute that Southwest first
learned of Persinger’s 2017 bankruptcy on May 22, 2018,
when LexisNexis returned bankruptcy information. At this
point, Southwest promptly closed the account. The record
demonstrates, without any genuine dispute, that Southwest
had a procedure by which it submitted a consumer’s infor‐
mation to LexisNexis, and if LexisNexis did not return bank‐
ruptcy information, it continued its collection activities.
Southwest also processed incoming bankruptcy notices and
closed affected accounts. To be sure, Persinger’s debt was dis‐
charged7 by the time Southwest obtained her propensity‐to‐
pay score—for this, there was no permissible purpose under
the FCRA. But Southwest lacked actual knowledge of the
bankruptcy, and it did not recklessly disregard the possibility
that debt had been discharged. The evidence shows that it had
a reasonable basis for relying on its procedures.8

     7Generally, a debt not listed by the petitioner on the bankruptcy
schedule is not discharged. 11 U.S.C. § 523(a)(3). But in a “no‐asset bank‐
ruptcy,” there is an equitable rule in this circuit permitting a petitioner to
amend its schedules post‐discharge to include omitted debts. In re
Jakubiak, 591 B.R. 364, 387–93 (Bankr. E.D. Wis. 2018) (discussing Seventh
Circuit precedent). The parties agree the Persingers’ bankruptcy resulted
in a “no‐asset discharge.” So, even though the bankruptcy schedule omit‐
ted the Viasat debt, it could likely be added to the bankruptcy schedule
and be considered discharged. See Gagan v. Am. Cablevision, Inc., 77 F.3d
951, 968 (7th Cir. 1996). Functionally, then, the Viasat debt was discharged.
     8Southwest’s compliance efforts appear successful. The putative class
contains 996 members. Southwest maintains accounts for about 1.8 to 1.9
million consumers. Accepting Persinger’s allegations as true, Southwest
achieved a 99.9% compliance rate during the relevant two‐year period.
No. 21‐1037                                                       23

                                 IV
   For these reasons, we AFFIRM the district court’s grant of
summary judgment to Southwest.

One could see a lower rate of compliance had Southwest knowingly vio‐
lated the law or recklessly disregarded statutory requirements.