In Persinger v. Sw. Credit Sys., L.P., No. 21-1037, 2021 U.S. App. LEXIS 37986, at *16-17 (7th Cir. Dec. 22, 2021), the Court of Appeals for the 7th Circuit affirmed dismissal of an FCRA “Permissible Purpose” case arising out of a post-discharge credit pull.  The facts were as follows:

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 Persingers’ 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 bankruptcy court notified all known creditors, including Southwest, 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 received notice of the Persingers’ 2017 bankruptcy, it had already 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 information 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 account information, continuously searches for matches, and forwards any bankruptcy data it later finds. As with bankruptcy 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 petition. Southwest, as a matter of course, ordered a bankruptcy scrub. Because LexisNexis did not immediately return any bankruptcy results, Southwest proceeded in its collection efforts.  To form a collection strategy, Southwest orders a “propensity-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 information about her 2017 bankruptcy. Upon receiving this update, Southwest closed the account.   After learning that Southwest accessed her credit information, Persinger filed a class-action complaint against Southwest, alleging violations of the FCRA. Following discovery, the parties filed cross-motions for summary judgment; the district court granted Southwest’s motion and denied Persinger’s motion. On appeal, Persinger challenges the grant of summary judgment to Southwest.

The Court of Appeals found no pecuniary loss to support a negligent violation of the FCRA.

For Persinger to survive Southwest’s motion for summary judgment on her negligence theory, she was required to proffer evidence showing Southwest impermissibly accessed her propensity-to-pay score causing her pecuniary or nonpecuniary harm. She failed to do so. As to pecuniary harm, she disavowed 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.” HN20 But damages for emotional distress must be proved with more than conclusory statements. Ruffin-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 reasonable juror could conclude [*17] that the inquiry into Persinger’s propensity-to-pay score resulted in actual damages.

Nor could the Plaintiff demonstrate a willful violation.

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. Despite this, Persinger argues Southwest should have implemented a procedure for annotating its computer system with bankruptcy information for application to future accounts. This theory would require Southwest to retain bankruptcy information for consumers that may never have an account placed with Southwest—more specifically, the debtors listed on the discharge order other than the debtor for which the notification 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 former names, just in case she ever had an account placed with Southwest. We agree with the district court that this prophylactic 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 bankruptcy notice would be both inefficient and duplicative of this bankruptcy scrub process.   Persinger also attacks the adequacy of Southwest’s bankruptcy-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 notice from LexisNexis of Persinger’s bankruptcy on January 4, 2018, before it procured her credit information.  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 bankruptcy information when it receives a “hit.” Southwest’s Chief Compliance Officer, Katie Zugsay, testified congruently. 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 generates 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 Southwest 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, willfulness. To support her argument, Persinger turns to Zugsay’s deposition testimony. But this testimony does not assist Persinger. In qualified language—riddled with phrases like “I believe” and “[i]t is my understanding”—Zugsay described her understanding that Southwest received results before the date reflected on the account notes. Rather than demonstrating 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 negative 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 ordered a bankruptcy scrub, received no results, and continued to collect on the debt. Months later, it received additional information from LexisNexis relating to Persinger’s bankruptcy 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 information to LexisNexis, and if LexisNexis did not return bankruptcy information, it continued its collection activities. Southwest also processed incoming bankruptcy notices and closed affected accounts. To be sure, Persinger’s debt was discharged 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.