When a creditor fails to get repayment of a Obligation, it Testament generally choose to appropriate a aggregation agency to fling to get worth, normally by paying the agency a lot of the process it successfully collects. This group agency may dry run to secure repayment in contrary ways, such as contacting the debtor or suing him in civil court. Moreover, the agency may choose to inspect the debtor's credit Announcement. Nevertheless, it cannot legally access the debtor's relatives' reports.
Credit Report
Credit reports are documents held by credit reporting agencies that embrace earful approximately an lone's credit legend. They file all the loans that the man has taken absent and if he has paid them back on allotment. This confidence is not accepted case, on the contrary is privately held by credit reporting agencies. Since of the info's sensitivity, laws restrict who can access this dossier, and credit reporting companies Testament onliest show the reports to certain parties.
Legitimate Business Obligation
However, the Fair Debt Collection Practices Act, a federal law, prohibits creditors or debt collection agencies from harassing relatives for any other reason; all creditors or debt collectors may do is call a relative in an effort to ascertain the debtor's whereabouts, and they must cease calling when the relative tells them to stop.
Penalties
A party who accesses a person's credit report under false pretenses can face civil penalties, as this is a violation of federal law.Exception
Under U.S. law, only a person who signs for a loan can be held responsible for its payment. If a debtor's relative cosigned a loan for which a debt collection agency is seeking payment -- meaning that the relative is partially responsible for the debt -- then the collection agency would have a valid interest in viewing his credit report.Under U.S. law, only parties with a legitimate business interest can access a person's credit report. For instance, a creditor considering whether a person should receive a loan will have a legitimate business interest in knowing the prospective borrower's lending history, as will a landlord who is considering renting the person an apartment. While a debt collection agency would have a legitimate business interest in knowing a debtor's credit history, it would not have a legitimate reason for accessing her relatives' reports and would therefore be forbidden from doing so.
Moreover, the party is likely to lose her right to view other credit reports, even for legitimate reasons. If the party were to violate the Fair Debt Collection Practices Act by harassing a debtor's relative, she would also face civil fines that would be paid in compensation to the debtor.
