Announced Action for April 23, 2004

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Commission authorization of the staff to file amicus brief: The Commission has authorized the filing of an amicus brief in the currently pending case, Cole v. U.S. Capital, Inc., et al., No. 03-3331 (7th Cir.). The case concerns issues surrounding enforcement of the Fair Credit Reporting Act (FCRA), over which the FTC has jurisdiction. In December 2001, Illinois resident Oneta Cole received an unsolicited advertisement from Jerry Gleason Chevrolet in Forest Park, Illinois. The ad offered her an auto loan of up to $19,500 if she would buy a car from the dealership. Small type on the bottom of the ad disclosed that the dealership had selected Cole for the offer based on her consumer (credit) report. It also disclosed that she was guaranteed to receive a credit line of $300 only for the purchase of a vehicle.

Cole never bought a car from the dealership or obtained credit in response to the ad. She did, however, sue the dealership and two other entities involved in the offer, alleging that they violated the FCRA because they lacked a permissible purpose for obtaining her consumer report. She contended that the offer itself was a sham, made merely so the defendants could obtain her credit report. In addition, she alleged that the defendants failed to make the mandatory disclosures on the ad in a clear and conspicuous manner. The district court hearing the case granted the defendants’ motion to dismiss, holding that Cole failed to state a claim upon which relief could be granted. Cole subsequently appealed the case to the 7th Circuit. Following oral argument, the court of appeals requested that the Commission file an amicus brief stating its views on the questions presented.

According to the FTC’s brief, which is available on the Commission’s Web site as a link to this press release, the 7th Circuit should overturn the decision of the district court. First, the brief argues that, if Cole can show that the dealership’s offer of credit was a sham, then it was improper for the dealership to obtain her credit report. The brief states that if an offer of credit is a sham, then that offer is not the sort of “firm offer of credit” that furnishes a business with a permissible purpose for receiving a consumer report. “To hold otherwise would exalt form over substance, and would also be contrary to the FCRA’s goal of protecting consumer privacy.” Second, the brief argues that Cole should be given an opportunity to show that the defendants’ offer was a sham, as the district court heard no evidence before dismissing her complaint.

Finally, the brief argues that the court improperly dismissed the complaint, without considering Cole’s allegation that the defendants did not make the required disclosures clearly and conspicuously.

The Commission vote authorizing filing of the brief was 4-0, with Chairman Timothy J. Muris not participating. (FTC File No. P042114; the staff contact is Lawrence DeMille Wagman, Office of General Counsel, 202-326-2448.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

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