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A Minnesota mother, a private investigation firm and a collection agency may have gone too far in performing a background check on the woman’s prospective son-in-law when they obtained a report on his credit card account and child-support obligations. The 8th U.S. Circuit Court of Appeals said on Dec. 5 that the trio will have to face a trial on the suitor’s claim that they violated the Fair Credit Reporting Act (FCRA). Phillips v. Grendahl, No. 01-2616. Mary K. Grendahl had hired McDowell Investigations to check out Lavon Phillips, her daughter’s fianc�. After getting his Social Security number from a public database, McDowell contacted Econ Control, a Minnetonka, Minn., company described by the court as being in the business of furnishing consumer reports to credit grantors and private investigators. Econ furnished McDowell with a “finder’s report,” listing Phillips’ credit card accounts and the support obligation. Phillips sued Grendahl, McDowell and Econ, alleging they violated the act by intentionally obtaining that information without a legitimate purpose. A Minnesota federal court granted summary judgment for the trio on all allegations, including a claim that they had invaded Phillips’ privacy and intruded into his personal seclusion. The 8th Circuit reinstated the credit act claims, holding that the finder’s report was a “consumer report” as defined by the act because it contained information “bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living.” The act allows access to consumer reports for certain purposes, such as decisions on credit, insurance or employment. But “investigating a person because he wants to marry one’s daughter” was not such a purpose, the court wrote. It remanded the case to determine the defendants’ intent. Grendahl’s attorney, Scott A. Johnson of Minneapolis’ Fabyanske, Westra & Hart, said his client swore she never asked the private investigator to get a prohibited consumer report. “It’s preposterous because there just isn’t any private information on it,” Johnson said. “You wouldn’t go to any great lengths to obtain this kind of document.” Phillips’ lawyer, Thomas J. Lyons Sr. of Little Canada, Minn., said that a phone message Grendahl left her daughter proves otherwise. The message said, “I didn’t directly do a credit report. I hired a PI and they have every right to do that.” McDowell argued that it had assurances from Econ, which, in turn, said it had assurances from the report’s issuer, Computer Science Corp., that the record was not a consumer report. “McDowell was very surprised to be named as a defendant in this suit,” said its lawyer, Joseph W. Dicker of Minneapolis. “They thought they were doing a background check, not a credit check, and there was certainly nothing illegal about doing a background check on an individual. “To the extent that these finder’s reports are being sold by credit agencies as not being consumer reports for purposes of the FCRA, this decision can have fairly significant impact.” Econ’s attorney could not be reached for comment. Lyons said the court’s opinion spotlights the misuse of credit reports, which have become the portal through which identity thieves pass. Johnson disagreed, stating, “The PI was able to find out much more negative information about the plaintiff through public records.” Phillips and his fianc�e did not marry.

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