Brooke Persinger v. Southwest Credit Systems, L.P.

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 21‐1037

BROOKE PERSINGER,

Plaintiff‐Appellant,

v.

SOUTHWEST CREDIT SYSTEMS, L.P.,

Defendant‐Appellee.

____________________

Appeal from the United States District Court for the

Southern District of Indiana, Indianapolis Division.

No. 19‐cv‐00853 — Richard L. Young, Judge.

____________________

ARGUED OCTOBER 27, 2021 — DECIDED DECEMBER 22, 2021

____________________

Before MANION, WOOD, and BRENNAN, Circuit Judges.

BRENNAN, Circuit Judge. In 2017, a bankruptcy court dis‐

charged Brooke Persinger’s debts. A few months later, South‐

west Credit Systems began collection efforts on a pre‐petition

debt of Persinger’s, including by acquiring a type of credit in‐

formation called her “propensity‐to‐pay score.” Alleging that

this information had been secured without a permissible pur‐

pose, Persinger sued Southwest under the Fair Credit Report‐

ing Act (“FCRA”), 15 U.S.C. § 1681 et seq. The district court

2 No. 21‐1037

granted summary judgment to Southwest, holding that

Southwest’s compliance procedures were reasonable and

thus met the FCRA’s requirements. For the reasons that fol‐

low, we affirm.

I

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 Persing‐

ers’ 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 bank‐

ruptcy court notified all known creditors, including South‐

west, 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 re‐

ceived notice of the Persingers’ 2017 bankruptcy, it had al‐

ready 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 infor‐

mation 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 ac‐

count information, continuously searches for matches, and

No. 21‐1037 3

forwards any bankruptcy data it later finds. As with bank‐

ruptcy 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 pe‐

tition. Southwest, as a matter of course, ordered a bankruptcy

scrub. Because LexisNexis did not immediately return any

bankruptcy results, Southwest proceeded in its collection ef‐

forts.

To form a collection strategy, Southwest orders a “propen‐

sity‐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 infor‐

mation about her 2017 bankruptcy. Upon receiving this up‐

date, Southwest closed the account.

After learning that Southwest accessed her credit infor‐

mation, Persinger filed a class‐action complaint against

Southwest, alleging violations of the FCRA. Following

discovery, the parties filed cross‐motions for summary judg‐

ment; the district court granted Southwest’s motion and de‐

nied Persinger’s motion. On appeal, Persinger challenges the

grant of summary judgment to Southwest.

4 No. 21‐1037

II

Before proceeding to the merits, we must answer the juris‐

dictional question of whether Persinger has standing to sue.

Although the district court did not address Southwest’s argu‐

ment that Persinger lacked standing, we have an “independ‐

ent obligation” to inspect, and remain within, jurisdictional

boundaries. Bazile v. Fin. Sys. of Green Bay, Inc., 983 F.3d 274,

281 (7th Cir. 2020) (quoting Henderson ex rel. Henderson v.

Shinseki, 562 U.S. 428, 434 (2011)). “The Article III standing in‐

quiry remains open to review at all stages of the litigation.”

Pennell v. Glob. Tr. Mgmt., LLC, 990 F.3d 1041, 1044 (7th Cir.

2021) (internal quotation marks omitted). But the plaintiff’s

“burden to demonstrate standing changes as the procedural

posture of the litigation changes.” Gracia v. SigmaTron Intʹl,

Inc., 986 F.3d 1058, 1063 (7th Cir. 2021). Where, as here, the

procedural posture is summary judgment, the plaintiff must

“set forth by affidavit or other evidence specific facts, which

for purposes of the summary judgment motion will be taken

to be true.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)

(internal quotation marks omitted).

Federal jurisdiction “extends only to ‘Cases’ and ‘Contro‐

versies.’” Spokeo, Inc. v. Robins, 578 U.S. 330, 337 (2016) (quot‐

ing U.S. CONST. art. III, § 2). Standing doctrine enforces this

limitation by ensuring that courts only adjudicate disputes in

which the plaintiff has a “personal stake.” TransUnion LLC v.

Ramirez, 141 S. Ct. 2190, 2203 (2021). Standing consists of three

elements: injury in fact, causation, and redressability. Lujan,

504 U.S. at 560–61. This case concerns the first element—in‐

jury in fact—which means the injury must be both “concrete

and particularized,” and “actual or imminent, not conjectural

or hypothetical.” Id. at 560 (internal quotation marks omitted).

No. 21‐1037 5

For an injury to be concrete, it must be “real, and not

abstract.” Spokeo, 578 U.S. at 340 (internal quotation marks

omitted). Tangible harms, like physical or monetary harms,

“readily qualify as concrete injuries.” Ramirez, 141 S. Ct. at

2204. Intangible harms may also be concrete, for example,

“reputational harms, disclosure of private information … in‐

trusion upon seclusion[,] … [a]nd those traditional harms …

specified by the Constitution itself.” Id. In determining

whether a harm is concrete, “history and tradition offer a

meaningful guide.” Sprint Commc’ns Co. v. APCC Servs., Inc.,

554 U.S. 269, 274 (2008). “[C]ourts should assess whether the

alleged injury to the plaintiff has a ‘close relationship’ to a

harm ‘traditionally’ recognized as providing a basis for a law‐

suit in American courts.” Ramirez, 141 S. Ct. at 2204 (quoting

Spokeo, 578 U.S. at 341).

When it comes to identifying concrete harms, Congress’s

judgment is important. But even if Congress imposes a “stat‐

utory prohibition or obligation and a cause of action,” courts

must still “independently decide whether a plaintiff has suf‐

fered a concrete harm under Article III.” Id. at 2205. “[U]nder

Article III, an injury in law is not an injury in fact. Only those

plaintiffs who have been concretely harmed by a defendant’s

statutory violation may sue that private defendant over that

violation in federal court.” Id.

The FCRA imposes statutory prohibitions and obligations,

including that a person shall not use or obtain a consumer re‐

port without a permissible purpose. 15 U.S.C. § 1681b(f). The

Act also provides a cause of action for negligent and willful

violations. 15 U.S.C. §§ 1681n–o. Persinger asserts that South‐

west violated § 1681b(f), causing her harm. This is not enough

6 No. 21‐1037

on its own to confer standing. We must decide whether this

harm qualifies as a concrete injury.

When reviewing potential injuries for standing purposes,

we are constrained by the operative complaint. Pennell, 990

F.3d at 1045. Persinger’s complaint alleged “financial and dig‐

nitary harm … and an injury to her credit rating and reputa‐

tion.”

Persinger’s deposition testimony illuminated these allega‐

tions. Southwest’s counsel asked Persinger how she was

harmed by Southwest’s inquiry into her propensity‐to‐pay

score. She responded, “Harmed? I mean, there’s stress on it,

yes.” Probing for more, counsel asked her if she had been

harmed in any other way. She added, “My personal privacy.”

To confirm, counsel asked if any she had experienced any

harm besides “personal privacy and stress.” Persinger an‐

swered, “No, sir.”

Prompted by Southwest’s counsel, Persinger clarified

what she meant by harm to her “personal privacy,” explain‐

ing: “My consumer report is for me and for the people that I

allow to look things up in, not for people that I didn’t sign off

for, didn’t give them permission to do.” When asked if South‐

west’s access angered her, Persinger responded “yes.”1

Next, Southwest’s counsel questioned Persinger about

any harms she may have suffered, making certain that Per‐

singer experienced only “stress” and an infringement of per‐

sonal privacy, congruent with her earlier answer. He asked

her if Southwest’s inquiry affected her ability to get a job; she

confirmed it did not. She gave the same response regarding

1 See R. 101‐1 at 58:14–59:20.

No. 21‐1037 7

her ability to obtain loans or credit cards—Persinger stated it

was not affected. Counsel continued: “You haven’t lost any

money because of Southwest Credit’s inquiry on your credit

report, have you?” Persinger replied, “Not to my acknowl‐

edgement.” Pressing on, counsel then asked Persinger

whether she had been denied housing, credit, employment,

or insurance. Persinger answered in the negative to each. In

summary, Southwest’s counsel asked: “So really the only way

Southwest Credit report’s inquiry has affected you that you

know of is it was essentially an invasion of your privacy; is

that correct? Persinger answered, “Yes.”2

Persinger’s deposition testimony undercuts her allega‐

tions of financial, credit, and reputational injuries. To begin,

she affirmatively represented that the only injury she suffered

was an invasion of privacy—though she initially named stress

too. Beyond this, she explicitly disclaimed loss of money,

housing, employment, or insurance (financial harms) and loss

of credit (credit harm). Persinger’s deposition provided no in‐

formation supporting the existence of reputational harm, and

she does not point us to anything else in the record support‐

ing this claim. So, that leaves us with dignitary harm as the

only allegation in Persinger’s complaint that might qualify as

a concrete injury.

But what did Persinger mean by dignitary harm? Her

deposition testimony and interrogatory responses supply two

options: stress and privacy harm. Even if stress can be fairly

labeled a dignitary harm, it is not a concrete injury. Wadsworth

v. Kross, Lieberman & Stone, Inc., 12 F.4th 665, 668–69 (7th Cir.

2021). A privacy harm, on the other hand, might be concrete,

2 See R. 101‐1 at 60:25–61:2; 66:10–68:1.

8 No. 21‐1037

and it is a form of dignitary harm. See Dignitary, BLACK’S LAW

DICTIONARY (11th ed. 2019). Importantly, it is the only eligible

harm for standing purposes—one that is both grounded in the

complaint and uncontradicted by the record. Closer examina‐

tion is necessary to determine whether this privacy harm is a

concrete injury under Article III.

Under Spokeo, Inc. v. Robins and TransUnion LLC v.

Ramirez, to determine whether a harm is concrete, we look to

both history and Congress’s judgment. Gadelhak v. AT&T

Servs., Inc., 950 F.3d 458, 462 (7th Cir. 2020), cert. denied, 141 S.

Ct. 2552 (2021).

Starting with history, courts look for a common law

analog to determine whether an alleged injury has “a close

relationship to a harm traditionally recognized as providing

a basis for lawsuits in American courts.” Ramirez, 141 S. Ct. at

2204. Persinger used the phrase “invasion of privacy,” but we

must look behind this allegation to determine whether the

challenged conduct bears a “close relationship” to the tort.

According to Persinger, Southwest violated the FCRA by ob‐

taining her credit information without a permissible purpose.

The next step is to pair this alleged violation—and the alleged

harm—to a common law analog, assessing whether a close re‐

lationship exists.

Traditionally, the tort of invasion of privacy encompassed

four theories of wrongdoing: intrusion upon seclusion, ap‐

propriation of a person’s name or likeness, publicity given to

private life, and publicity placing a person in a false light. See

RESTATEMENT (SECOND) OF TORTS §§ 652A–652E (AM. L. INST.

1977). For this case, intrusion upon seclusion is the best com‐

parator, which occurs when a person “intrudes … upon the

solitude or seclusion of another or his private affairs or

No. 21‐1037 9

concerns” and this “intrusion would be highly offensive to a

reasonable person.” Id. § 652B. For example, an intrusion

upon seclusion may be committed “by opening [a person’s]

private and personal mail, searching his safe or his wallet, [or]

examining his private bank account.” Id. § 652B cmt. b.

An unauthorized inquiry into a consumer’s propensity‐to‐

pay score is analogous to the unlawful inspection of one’s

mail, wallet, or bank account. To be sure, a propensity‐to‐pay

score is a number—distilled from a consumer’s financial his‐

tory—indicating likelihood of repayment. In that sense, it pro‐

vides less information to a debt collection agency than a full

credit report would provide. Nevertheless, Spokeo and

Ramirez make clear our responsibility to look for a close rela‐

tionship “in kind, not degree.” See Gadelhak, 950 F.3d at 462.

Whether Persinger would prevail in a lawsuit for common

law invasion of privacy is irrelevant.3 It is enough to say that

the harm alleged in her complaint resembles the harm associ‐

ated with intrusion upon seclusion. See id. at 462–63. Thus, it

3 At oral argument, Southwest’s counsel urged us to apply the ele‐

ments of intrusion upon seclusion, arguing that Persinger’s injury falls

short of being highly offensive to a reasonable person—one of the tort’s

elements. Oral Argument at 11:30–12:43. Counsel was correct about intru‐

sion upon seclusion’s elements, see RESTATEMENT (SECOND) OF TORTS

§ 652B, but under Ramirez, we do not look for an “exact duplicate,” we

look for a “close relationship.” Ramirez, 141 S. Ct. at 2209. In Ramirez, the

Supreme Court referenced defamation’s “essential” element of publica‐

tion not to apply, in full, the elements of defamation, but to explain why

defamation failed as an analogy for those plaintiffs whose inaccurate in‐

formation had not been shared. See id. at 2209–10. In sum, once we identify

a tort analog, our role ends. And here, the tort analog is intrusion upon

seclusion. Whether unauthorized procurement of a propensity‐to‐pay

score is “highly offensive,” moderately offensive, or slightly offensive is

not before us.

10 No. 21‐1037

is a concrete injury. Cf. Fox v. Dakkota Integrated Sys., LLC, 980

F.3d 1146, 1155–56 (7th Cir. 2020) (holding that an alleged vi‐

olation of Illinois’s Biometric Information Privacy Act consti‐

tuted a concrete injury because the unauthorized collection of

biometric data was analogous to an invasion of privacy);

Gadelhak, 950 F.3d at 462–63 (analogizing to intrusion upon

seclusion and ruling that receiving “unwanted text messages

can constitute a concrete injury‐in‐fact”).

Congress’s judgment supports our view. Although “Con‐

gress cannot transform a non‐injury into an injury on its say‐

so,” Gadelhak, 950 F.3d at 462, the FCRA’s protection of

consumer credit information is akin to the common law’s pro‐

tection of private information through the tort of invasion of

privacy. To safeguard consumer credit information, Congress

drafted § 1681b, which makes it unlawful to furnish, obtain,

or use a consumer’s credit information without a permissible

purpose. In doing so, Congress created a federal cause of ac‐

tion for a common‐law‐like harm; it did not attempt to “enact

an injury into existence.” Ramirez, 141 S. Ct. at 2205 (quoting

Hagy v. Demers & Adams, 882 F.3d 616, 622 (6th Cir. 2018)).

This conclusion fits well with our recent decision in Crab‐

tree v. Experian Info. Sols., Inc., 948 F.3d 872 (7th Cir. 2020). In

Crabtree, as here, the plaintiff alleged a § 1681b violation. See

id. at 875. The defendant claimed, as its permissible purpose

for disclosing the plaintiff’s credit information, the provision

of the FCRA allowing a consumer reporting agency to dis‐

close credit information without consumer initiation if the

disclosure results in a “firm offer of credit or insurance.” Id.

at 875; 15 U.S.C. § 1681b(c)(1)(B)(i). Because the plaintiff con‐

ceded he likely received a firm offer of credit, he failed to ar‐

ticulate a concrete harm. Crabtree, 948 F.3d at 879.

No. 21‐1037 11

Even though Crabtree held that the plaintiff lacked stand‐

ing, it made clear that some FCRA violations may qualify as

concrete harms. Id. at 879–80. This observation followed from

the Supreme Court’s recognition of a “right to privacy that

‘encompass[es] the individual’s control of information con‐

cerning his or her person,’” id. (quoting U.S. Depʹt of Justice v.

Reporters Comm. for Freedom of Press, 489 U.S. 749, 763 (1989)),

and Congress’s decision to protect this right in the FCRA. Id.

Additionally, Crabtree noted our previous recognition of a

consumer’s right to privacy in credit information. See Cole v.

U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004) (holding that a

plaintiff stated a claim under § 1681b when her credit infor‐

mation was shared but no firm offer of credit was extended).

Under these principles, Crabtree correctly observed that a

§ 1681b violation may qualify as a concrete harm. This is such

a case.

Looking to other federal courts of appeals, our reasoning

comports with that of the Ninth Circuit, which recently held

that a § 1681b(f) violation was a concrete injury. In Nayab v.

Capital One Bank, 942 F.3d 480 (9th Cir. 2019), that court relied

on circuit precedent, the common law analog of intrusion

upon seclusion, and Congress’s judgment to decide that the

plaintiff’s allegations of a § 1681b(f) violation supported

standing. Id. at 489–93. We agree with its assessment of his‐

tory and Congress’s judgment. Particularly, the court con‐

cluded, as we do, that “[t]he harm attending a violation of

§ 1681b(f)(1) of the FCRA is closely related to—if not the same

as—a harm that has traditionally been regarded as providing

a basis for a lawsuit: intrusion upon seclusion (one form of the

tort of invasion of privacy).” Id. at 491. And it noted that the

FCRA’s declared purpose of “insur[ing] that consumer re‐

porting agencies exercise their grave responsibilities with

12 No. 21‐1037

fairness, impartiality, and a respect for the consumer’s right

to privacy” evidenced Congress’s judgment. Id. at 492

To sum up, history and precedent compel a simple result:

Persinger has standing to sue. She testified that Southwest in‐

vaded her privacy when it reviewed her credit information.

Under Spokeo and Ramirez, this is a concrete injury because it

is analogous to the common law tort of intrusion upon seclu‐

sion. Thus, Persinger has standing to seek damages under 15

U.S.C. §§ 1681n–o.

III

Now we turn to the merits. We review the district court’s

summary‐judgment order de novo and construe the record in

the light most favorable to Persinger—the nonmoving party.

James v. Hale, 959 F.3d 307, 314 (7th Cir. 2020).

In 1970, the FCRA became law “to ensure fair and accurate

credit reporting, promote efficiency in the banking system,

and protect consumer privacy.” Safeco Ins. Co. of Am. v. Burr,

551 U.S. 47, 52 (2007). Sharing credit information, “though

often necessary in the modern economy, can result in a signif‐

icant invasion of privacy and can jeopardize a consumer’s

personal, reputational, and financial well‐being.” Rodriguez v.

Sprint/United Mgmt. Co., 163 F. Supp. 3d 529, 533 (N.D. Ill.

2016).

To safeguard these interests, the FCRA provides a private

right of action for injured consumers. Safeco, 551 U.S. at 53;

TRW Inc. v. Andrews, 534 U.S. 19, 23 (2001). A negligent viola‐

tion entitles a consumer to actual damages. 15 U.S.C.

§ 1681o(a). A willful violation entitles a consumer to actual

damages or statutory damages, with punitive damages left to

No. 21‐1037 13

the court’s discretion. 15 U.S.C. § 1681n(a). Persinger ad‐

vances both a negligence theory and a willfulness theory.

A

To prove a negligent violation of the FCRA, a plaintiff

must establish “actual damages.” 15 U.S.C. § 1681o(a)(1); Ruf‐

fin‐Thompkins v. Experian Info. Sols., Inc., 422 F.3d 603, 607–08

(7th Cir. 2005). Actual damages require a “causal relation” be‐

tween the statutory violation and the harm suffered by the

plaintiff. Aldaco v. RentGrow, Inc., 921 F.3d 685, 689 (7th Cir.

2019) (quoting Crabill v. Trans Union, L.L.C., 259 F.3d 662, 664

(7th Cir. 2001)).

An FCRA violation may inflict pecuniary harm, like lost

income or out‐of‐pocket expenses caused by denials of credit,

housing, or insurance. Id. at 689–90 (recognizing the possibil‐

ity that an FCRA violation may cause denial of housing but

holding that the plaintiff failed to establish causation); Robin‐

son v. Equifax Info. Servs., LLC, 560 F.3d 235, 241 n.2 (4th Cir.

2009) (identifying loss of income as a cognizable form of ac‐

tual damages); Crabill, 259 F.3d at 664 (noting that “loss of

credit” may support actual damages); Millstone v. OʹHanlon

Reps., Inc., 528 F.2d 829, 831 (8th Cir. 1976) (affirming award

of actual damages after an inaccurate report caused tempo‐

rary denial of insurance).

Nonpecuniary harms, including reputational damage and

emotional distress, may also follow an FCRA violation,

though these harms must be described in “reasonable de‐

tail”—conclusory statements are insufficient. See Ruffin‐

Thompkins, 422 F.3d at 610; see also Robinson, 560 F.3d at 241

(holding that plaintiff provided sufficient proof of emotional

distress caused by FCRA violation); Konter v. CSC Credit

Servs., Inc., 606 F. Supp. 2d 960, 969 (W.D. Wis. 2009)

14 No. 21‐1037

(concluding that plaintiff failed to establish a causal link be‐

tween FCRA violation and emotional distress). However the

plaintiff frames her case, she bears the burden to prove actual

damages, whether pecuniary or nonpecuniary. Ruffin‐Thomp‐

kins, 422 F.3d at 610.

For Persinger to survive Southwest’s motion for summary

judgment on her negligence theory, she was required to prof‐

fer evidence showing Southwest impermissibly accessed her

propensity‐to‐pay score causing her pecuniary or nonpecuni‐

ary harm. She failed to do so. As to pecuniary harm, she dis‐

avowed 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.” But damages for emotional distress

must be proved with more than conclusory statements. Ruf‐

fin‐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 reason‐

able juror could conclude that the inquiry into Persinger’s

propensity‐to‐pay score resulted in actual damages.

B

Even if a plaintiff cannot prove actual damages, she may

still recover statutory or punitive damages by proving that

the defendant willfully violated the FCRA. 15 U.S.C.

§ 1681n(a); Redman v. RadioShack Corp., 768 F.3d 622, 627 (7th

Cir. 2014).

A willful violation is one committed with actual

knowledge or reckless disregard for the FCRA’s require‐

ments. Safeco, 551 U.S. at 57. A company recklessly violates

No. 21‐1037 15

the FCRA when it commits “a violation under a reasonable

reading of the statute’s terms,” and its erroneous reading

“[runs] a risk of violating the law substantially greater than

the risk associated with a reading that was merely careless.”

Id. at 69; see also Murray v. New Cingular Wireless Servs., Inc.,

523 F.3d 719, 726 (7th Cir. 2008) (discussing and applying

Safeco).

The Safeco standard raises a sequencing issue. Courts may

pass over the antecedent question of whether a violation oc‐

curred, moving directly to whether the defendant negligently

or willfully violated the statute. See Marino v. Ocwen Loan

Servicing LLC, 978 F.3d 669, 674 (9th Cir. 2020) (discussing se‐

quencing in FCRA cases). This is akin to the sequencing di‐

lemma courts face in qualified immunity cases. Safeco, 551

U.S. at 70 (citing, as analogous, Saucier v. Katz, 533 U.S. 194

(2001)); Marino, 978 F.3d at 674. In Safeco, the Supreme Court

first decided whether a violation occurred, then it turned to

the analysis of mental state. See Safeco, 551 U.S. at 60–70. We

do the same here, as we have in the past. See, e.g., Shlahtichman

v. 1‐800 Contacts, Inc., 615 F.3d 794, 798–804 (7th Cir. 2010) (de‐

ciding whether a violation occurred before assessing mental

state).

1

The FCRA prohibits consumer credit reporting agencies

from furnishing a “consumer report,”4 except in enumerated

4 Southwest does not dispute that a propensity‐to‐pay score is a “con‐

sumer report.” By statute, a “consumer report” includes “any written,

oral, or other communication of any information by a consumer reporting

agency bearing on a consumer’s credit worthiness.” 15 U.S.C.

§ 1681a(d)(1). A propensity‐to‐pay score fits this description.

16 No. 21‐1037

circumstances—in other words, when there is a permissible

purpose. 15 U.S.C. § 1681b(a). Relatedly, a person shall not

“use or obtain a consumer report” unless it is obtained for a

permissible purpose. Id. § 1681b(f).

Persinger claims that Southwest violated § 1681b(f) when

it obtained her propensity‐to‐pay score. As a permissible pur‐

pose, Southwest points to § 1681b(a)(3)(A), which allows a

person to obtain a consumer report if he (1) “intends to use

the information,” (2) “in connection with a credit transac‐

tion,” (3) “involving the consumer on whom the information

is to be furnished,” and (4) “involving the extension of credit

to, or review or collection of an account of, the consumer.” 15

U.S.C. § 1681b(a)(3)(A).

A premise to Persinger’s argument is that § 1681b(a)(3)(A)

does not apply when a consumer’s debts have been dis‐

charged in bankruptcy. Such an understanding would be too

broad, but this nuance seems to have eluded the parties, as

neither of them discussed the statutory language in their

briefs.5

5We take this moment to address one other textual matter. For

§ 1681b(a)(3)(A) to qualify as a permissible purpose, there must be a

“credit transaction involving the consumer.” 15 U.S.C. § 1681b(a)(3)(A).

The FCRA defines “credit” to mean “the right granted by a creditor to a

debtor to defer payment of debt or to incur debts and defer its payment or

to purchase property or services and defer payment therefor.” Id.

§§ 1681a(r)(5), 1691a(d). In our view, the plain meaning of “credit transac‐

tion” contemplates an agreement by which the right of deferred payment

is promised in exchange for some form of consideration.

In this case, the account for which Southwest requested credit infor‐

mation is a debt owed to Viasat Residential. Whether this transaction be‐

tween Persinger and Viasat Residential is a “credit transaction” is unclear

from the record. To the extent this affects Southwest’s ability to claim

No. 21‐1037 17

The plain meaning of § 1681b(a)(3)(A) does not unambig‐

uously forbid access to credit information relating to an ac‐

count subject to bankruptcy. When a debt‐collection agency

“intends to use” a consumer report “in connection with a

credit transaction involving the consumer on whom the infor‐

mation is to be furnished,” the agency may obtain and use

that report if it also “intends to use” the consumer report to

(1) extend credit to the consumer, (2) review her account, or

(3) collect on her account. See 15 U.S.C. § 1681b(a)(3)(A).

Persinger focuses on the third option, “collection of an ac‐

count.” Id. § 1681b(a)(3)(A). To the extent Southwest intended

to use Persinger’s credit information to collect on the Viasat

debt, Persinger is right: Southwest would be unable to claim

§ 1681b(a)(3)(A) as a permissible purpose. After all, South‐

west is a debt‐collection agency, and it uses consumer credit

information to form a collection strategy. Because Southwest

does not suggest it had a reason for procuring Persinger’s pro‐

pensity‐to‐pay score other than for collection,

§ 1681b(a)(3)(A) provides no justification. To answer the an‐

tecedent question, then, obtaining a propensity‐to‐pay score

for the purpose of collecting on a discharged debt violates the

FCRA, absent another permissible purpose.

But a bankruptcy’s effect on § 1681b(a)(3)(A) should not

be read too broadly. Indeed, Southwest never concedes that it

always lacks a permissible purpose when a bankruptcy im‐

pacts one of its accounts. In deposition testimony, South‐

west’s officers admitted to having a policy against proceeding

§ 1681b(a)(3)(A) as a permissible purpose, Persinger forfeited her oppor‐

tunity to raise the issue. United States v. Sheth, 924 F.3d 425, 435 (7th Cir.

2019) (“A party forfeits an argument by failing to raise it below, or by rais‐

ing it in a perfunctory or general manner.”).

18 No. 21‐1037

with collection efforts after it learns that a debt is discharged.

This policy is grounded in practical and legal realities—a dis‐

charged debt cannot be collected (indeed, it is unlawful to

try).6 But Southwest’s Chief Compliance Officer rejected the

idea that bankruptcy made it illegal for Southwest to obtain a

propensity‐to‐pay score altogether, leaving open the possibil‐

ity that, in some instances, the FCRA would still permit

Southwest to procure a consumer report notwithstanding an

underlying bankruptcy.

We think this interpretation is correct, as do other courts,

which have recognized that § 1681b(a)(3)(A) is not categori‐

cally inapplicable where the underlying debt is discharged or

the underlying account is closed. See Marino, 978 F.3d at 672;

Levine v. World Fin. Network Nat. Bank, 554 F.3d 1314, 1318

(11th Cir. 2009); Banga v. First USA, NA, 29 F. Supp. 3d 1270,

1278 (N.D. Cal. 2014).

To recap, a firm violates the FCRA when it obtains a con‐

sumer report without a permissible purpose. 15 U.S.C.

§ 1681b(f). One permissible purpose is intending to use credit

information to collect on an account. See id. § 1681b(a)(3)(A).

But this permissible purpose is unavailable when the under‐

lying debt is discharged. Thus, a debt‐collection agency can‐

not claim § 1681b(a)(3)(A) as a permissible purpose if its sole

purpose for accessing a consumer report is collection. Other

reasons, even under § 1681b(a)(3)(A), may still justify obtain‐

ing a consumer report. Here, the record shows that Southwest

intended to collect on the Viasat account, which was subject

to bankruptcy. Accordingly, Southwest’s credit inquiry fell

outside the parameters of § 1681b(a)(3)(A).

6 See 11 U.S.C. § 524(a); Taggart v. Lorenzen, 139 S. Ct. 1795, 1800 (2019).

No. 21‐1037 19

2

To prevail under § 1681n, Persinger must show that

Southwest not only violated the FCRA but did so willfully.

She points to two predicate actions: Southwest’s handling of

the 2017 bankruptcy notice and Southwest’s bankruptcy

scrub procedure. Viewed as a whole, Southwest’s

procedures—whether for handling bankruptcy notifications

or ordering bankruptcy scrubs—were reasonable compliance

efforts, not willful violations of the FCRA.

A willful violation is one committed with actual

knowledge or recklessness. Safeco, 551 U.S. at 56–57; Murray,

523 F.3d at 726. Recall that Southwest passively receives noti‐

fications from bankruptcy courts and actively searches for

bankruptcies affecting its open accounts. Persinger argues

these procedures are flawed (to a willfully unlawful extent)

because they failed to reveal her 2017 bankruptcy. It is true

that Persinger’s bankruptcy predated the Viasat debt’s place‐

ment with Southwest. But we must determine whether South‐

west’s failure to reveal her bankruptcy occurred with actual

knowledge or recklessness.

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. De‐

spite this, Persinger argues Southwest should have imple‐

mented a procedure for annotating its computer system with

bankruptcy information for application to future accounts.

This theory would require Southwest to retain bankruptcy in‐

formation for consumers that may never have an account

placed with Southwest—more specifically, the debtors listed

20 No. 21‐1037

on the discharge order other than the debtor for which the no‐

tification 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 for‐

mer names, just in case she ever had an account placed with

Southwest. We agree with the district court that this prophy‐

lactic 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 bank‐

ruptcy notice would be both inefficient and duplicative of this

bankruptcy scrub process.

Persinger also attacks the adequacy of Southwest’s bank‐

ruptcy‐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 no‐

tice from LexisNexis of Persinger’s bankruptcy on January 4,

2018, before it procured her credit information.

No. 21‐1037 21

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 bank‐

ruptcy information when it receives a “hit.” Southwest’s

Chief Compliance Officer, Katie Zugsay, testified congru‐

ently. 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 gener‐

ates 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 South‐

west 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, will‐

fulness. To support her argument, Persinger turns to Zugsay’s

deposition testimony. But this testimony does not assist Per‐

singer. In qualified language—riddled with phrases like “I be‐

lieve” and “[i]t is my understanding”—Zugsay described her

understanding that Southwest received results before the

date reflected on the account notes. Rather than demonstrat‐

ing 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 nega‐

tive 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 or‐

dered a bankruptcy scrub, received no results, and continued

to collect on the debt. Months later, it received additional

22 No. 21‐1037

information from LexisNexis relating to Persinger’s bank‐

ruptcy 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 infor‐

mation to LexisNexis, and if LexisNexis did not return bank‐

ruptcy information, it continued its collection activities.

Southwest also processed incoming bankruptcy notices and

closed affected accounts. To be sure, Persinger’s debt was dis‐

charged7 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.8

7Generally, a debt not listed by the petitioner on the bankruptcy

schedule is not discharged. 11 U.S.C. § 523(a)(3). But in a “no‐asset bank‐

ruptcy,” there is an equitable rule in this circuit permitting a petitioner to

amend its schedules post‐discharge to include omitted debts. In re

Jakubiak, 591 B.R. 364, 387–93 (Bankr. E.D. Wis. 2018) (discussing Seventh

Circuit precedent). The parties agree the Persingers’ bankruptcy resulted

in a “no‐asset discharge.” So, even though the bankruptcy schedule omit‐

ted the Viasat debt, it could likely be added to the bankruptcy schedule

and be considered discharged. See Gagan v. Am. Cablevision, Inc., 77 F.3d

951, 968 (7th Cir. 1996). Functionally, then, the Viasat debt was discharged.

8Southwest’s compliance efforts appear successful. The putative class

contains 996 members. Southwest maintains accounts for about 1.8 to 1.9

million consumers. Accepting Persinger’s allegations as true, Southwest

achieved a 99.9% compliance rate during the relevant two‐year period.

No. 21‐1037 23

IV

For these reasons, we AFFIRM the district court’s grant of

summary judgment to Southwest.

One could see a lower rate of compliance had Southwest knowingly vio‐

lated the law or recklessly disregarded statutory requirements.