All terms

Permissible purpose

Permissible purpose — Permissible purpose is the statutory justification a user must have before obtaining a consumer report, and for collections the operative one is the extension of credit to, or review or collection of an account of, the consumer.

FCRA § 1681b(a)(3)(A) authorizes furnishing a report to a person who intends to use it "in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer." Section 1681b(a)(3)(F) supplies the alternative "legitimate business need" basis. For a collections firm the practical questions are whether the account it is collecting is the account it is pulling on, whether the pull is documented at the account level, and whether skip-trace products in use are FCRA-regulated consumer reports or non-FCRA locate data — the answer determines what permissible purpose, if any, is required.

See also

• Skip traceSkip tracing is the process of locating a consumer or verifying current contact information — address, telephone number, employer — when the information supplied at placement is stale or wrong.
• FurnisherA furnisher is an entity that provides information relating to consumers to one or more consumer reporting agencies for inclusion in a consumer report.
• ExaminationAn examination is a supervisory review conducted by a prudential regulator or the CFPB to assess compliance with federal consumer financial law, obtain information about an entity's activities and compliance systems, and detect risks to consumers and markets.

This is an informational reference, not legal advice, and using it creates no attorney-client relationship. Limitations periods turn on facts this page cannot know — which state's law governs, the contract type, when the claim accrued, and whether anything tolled or revived it. Confirm against the primary source and your own counsel before acting.