Permission vs. Permissible

People who access your credit report have to have your permission—unless they have a “permissible purpose” for viewing that information.

In other words, sometimes people have every right to pull your credit without your permission.

Take the case of Karen Wiegand and Steve Marzluff. Under the terms of their divorce settlement in 1994, she got to keep the house, and he was required to make child support payments to her.

In later discussions, they agreed that she would transfer her interest in the house to Marzluff, and he would pay her $6,000 and refinance the mortgage so that she was no longer a debtor on the property. She deeded the property to him in 1995. But he never refinanced. He also stopped making his child support payments in January 2000.

Wiegand might never have known that she was still on the mortgage, if she hadn’t applied for a loan on a new residence in February 2001. During the application process, she discovered that she was still indebted on the old property.

At the time, Wiegand worked for Verizon Wireless. As part of her job, she obtained credit approval for people who applied for cellular telephone service. Upset about her ex-husband’s failure to hold up his end of the bargain, Wiegand used her company laptop to check his credit score to see if it was good enough to have enabled him to refinance the house.

When she did, Verizon’s computer system automatically generated a letter to Marzluff confirming his “application for cell phone service.”

Marzluff hadn’t applied for cell phone service, and he told that to Verizon. Verizon discovered Wiegand had obtained her ex-husband’s credit score without his permission. This was against company policy; she was promptly fired.

Meanwhile, Marzluff decided to sue both his ex-wife and Verizon for a variety of things, including violation of the Fair Credit Reporting Act (FCRA) for checking his credit without his permission.

When the case went to appeal, the Montgomery County, Ohio court surprised Marzluff. It said his ex-wife did indeed have a “permissible purpose” for checking his credit. In this case, the court said that their relationship was not one of ex-husband and ex-wife, but one of debtor and creditor.

The court wrote:

Wiegand had at least some reason to believe that Marzluff owed her a debt and that he had failed to comply with the terms of their transaction. These facts are sufficient to create a permissible purpose under the FCRA....

So the court determined that she—as an ex-spouse in the midst of a divorce—had the right to check Marzluff’s credit without his permission.

Next: Sneaky Peeks