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McCANE v. AMERICA'S CREDIT JEWELERS
December 1, 2005.
KENNETH D. McCANE, Plaintiff,
AMERICA'S CREDIT JEWELERS, INC., d/b/a THE DIAMOND CENTER, Defendant.
The opinion of the court was delivered by: SUZANNE CONLON, District Judge
MEMORANDUM OPINION AND ORDER
Kenneth D. McCane brings a putative class action against
America's Credit Jewelers, Inc. ("ACJ"), doing business as The
Diamond Center, alleging violations of the Fair Credit Reporting
Act ("the FCRA"), 15 U.S.C. § 1681, et seq. Pursuant to Federal
Rule of Civil Procedure 12(b)(6), ACJ moves to dismiss the
complaint. For the reasons set forth below, the motion is granted
The following facts are drawn from the complaint. McCane is a
consumer residing in Illinois. He never initiated any credit
transactions with ACJ, a Delaware corporation with an office in
Illinois. Nor did he authorize ACJ to access his credit report.
But ACJ sent him a letter, offering a gold club card. Compl. Ex.
A. According to the letter, ACJ pre-approved him for a $5,000
line of credit. To receive the card, he would need to show a
valid identification and proof of income. The letter further
This offer is available to new customers who do not
currently have an open credit line with The Diamond
Center. You were selected to receive this offer
because your consumer report from Equifax met our
initial criteria. Final acceptance is subject to ability to meet our full eligibility requirements.
Annual percentage rate not to exceed 19.8%. If you
wish to opt-out of future offers, please write
Equifax Options, PO Box 740123, Atlanta, GA
30374-0123 or call 888-567-8688.
The letter provided no additional information about the card.
Based on this letter, McCane filed the present putative class
action. His complaint alleges ACJ's letter violates two FCRA
provisions: (1) 15 U.S.C. § 1681b(c)(1)(B)(i) by failing to make
a firm offer of credit; and (2) 15 U.S.C. § 1681m(d) by failing
to provide clear and conspicuous disclosures of consumers' rights
to prevent further unsolicited use of their credit reports.
ACJ moves to dismiss solely on the ground that § 1681m provides
no private right of action. McCane's § 1681b claims are
unaffected by this motion.
I. Motion to Dismiss Standard
In ruling on a motion to dismiss, the court must accept
well-pleaded allegations as true and draw all reasonable
inferences in favor of the nonmoving party. Cler v. Ill. Educ.
Ass'n, 423 F.3d 726, 729 (7th Cir. 2005). "A motion to dismiss
under Rule 12(b)(6) challenges the sufficiency of the complaint,
and dismissal of an action under the rule is warranted only if
`no relief could be granted under any set of facts that could be
proved consistent with the allegations.'" Id. (quoting DeWalt
v. Carter, 224 F.3d 607, 612 (7th Cir. 2000)). But a claim by an
individual to enforce a federal statute must be dismissed if the
underlying statute authorizes no private right of action. See
Slovinec v. DePaul Univ., 332 F.3d 1068, 1069 (7th Cir. 2003)
(per curiam). II. McCane's § 1681m Claims and ACJ's Motion
The FCRA aims to protect consumers' right to privacy.
15 U.S.C. § 1681(a)(4). Unless consumers initiate a transaction, their
credit reports may be accessed only in limited situations set
forth in § 1681b(c). One such situation is when a creditor
extends a "firm offer of credit" to a consumer.
15 U.S.C. § 1681b(c)(1)(B)(i). In addition to satisfying the firm-offer
requirement, a creditor must make "a clear and conspicuous
statement" with the following details:
(A) information contained in the consumer's consumer
report was used in connection with the transaction;
(B) the consumer received the offer of credit or
insurance because the consumer satisfied the criteria
for credit worthiness [sic] or insurability under
which the consumer was selected for the offer;
(C) if applicable, the credit or insurance may not be
extended if, after the consumer responds to the
offer, the consumer does not meet the criteria used
to select the consumer for the offer or any
applicable criteria bearing on credit worthiness
[sic] or insurability or does not furnish any
(D) the consumer has a right to prohibit information
contained in the consumer's file with any consumer
reporting agency from being used in connection with
any credit or insurance transaction that is not
initiated by the consumer; and
(E) the consumer may exercise the right referred to
in subparagraph (D) by notifying a notification
system established under section 1681b(e) of this
15 U.S.C. § 1681m(d)(1). Under sections 1681n and 1681o,
consumers may file civil actions for violations of certain FCRA
provisions. McCane alleges ACJ violated both § 1681b and § 1681m.
ACJ argues that a private right of action to enforce § 1681m
was repealed by the Fair and Accurate Credit Transactions Act of
2003 ("the FACTA"), Pub.L. No. 108-159, 117 Stat. 1952 (2003).
Section 311(a) of the FACTA added subsection (h) to § 1681m.
See Pub.L. No. 108-159, § 311(a), 117 Stat. 1952, 1988-89.
Paragraph (8) of the amended § 1681m(h) reads: ENFORCEMENT
Sections 1681n and 1681o of this title shall not
apply to any failure by any person to comply with
(B) Administrative enforcement
This section shall be enforced exclusively under
section 1681s of this title by the Federal agencies
and officials identified in that section.
15 U.S.C. § 1681m(h)(8) (emphasis added). Interpreting the term
"section" in its plain meaning, ACJ concludes § 1681 m(h)(8)(A)
eliminates the private right of action under the entire ...
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