SANTA ANA, Calif. (Legal Newsline) – Judgment for CashCall and LoanMe has been overturned in a lawsuit alleging they accessed hundreds of thousands of credit reports without intending to make an offer of credit.
A California appeals court made the ruling on May 13 in Alexis Sosa’s lawsuit against the lenders, who are hoping they won’t be ordered to pay statutory penalties.
CashCall and LoanMe obtained a list from the credit reporting agency Experian that contained anonymous consumers who met certain loan criteria.
They then contacted the individuals, including Sosa, who alleges they should be liable under California law for civil penalties of up to $2,500 per each unauthorized access.
But there’s an exception for lenders who intend to make “a firm offer of credit.” The trial court ruled that exception applied, but the Court of Appeals for the Fourth Appellate District, Division Three reversed it.
“(I)t is arguably a reasonable inference that the lenders intended to honor the advertised loans if the consumers had accepted the proposed loan terms,” Justice Eileen Moore wrote.
“But given the hundreds of thousands of mailed loan offers, and the complete absence of evidence regarding whether any of the loan offers were actually honored… it is also a reasonable inference that the thousands of loan offers were not, in fact, firm offers of credit.”
To prove the offers weren’t “firm,” Sosa asked for records of how many of those mailed actually accepted the terms of the loans proposed in the mailer. The trial court ruled that information was beyond the scope of relevant discovery.
The Fourth District says that ruling was erroneous and overturned the summary judgment ruling that followed it.
Justice Richard Aronson, in a dissent, says the lenders proved they would have honored the terms of the offer mailed to Sosa, making it “firm.”