On May 29, 2014, in the matter of Karrigan v. DataX Ltd. et al., in the U.S. District Court for the Northern District of California, Civil Action No. 3:13-cv-02995, a federal judge dismissed on summary judgment a putative class action accusing DataX Ltd. of giving credit reports to scammers who manipulated payday loan customers into paying $5 million, ruling the plaintiff failed to show that DataX gave the reports to anyone connected to the scam.

Karrigan’s suit claimed he applied for three payday loans in 2011, entering personal information including his social security number on a library computer.  He later defaulted on one of the loans.  In 2012, Karrigan got a call saying that he was the prime suspect in a criminal case for failing to repay a payday loan, and that if he did not pay $500 he would go to jail, according to the complaint.

Karrigan’s suit alleged this was all part of a $5 million scam that was later stopped by the Federal Trade Commission.  Karrigan assumed he was a victim of that scam because the FTC believed the scammers were based in India and the fake debt collector Karrigan spoke to had an Indian accent, according to the complaint.

The suit claimed the aforementioned scammers got Karrigan’s personal information from the defendants, but DataX countered that it only sold reports about Karrigan’s default to two credentialed customers.  Those customers were a loan servicing company and a short-term lender that DataX believed would use the information for allowed purposes under the Fair Credit Reporting Act.

The court granted DataX and parent Selling Source LLC’s motion for summary judgment, ruling that Karrigan was asking the court to make several inferences to connect the defendants to the scam, but that no reasonable jury could infer that connection because there was no evidence showing scammers got Karrigan’s personal information from the companies.  “Plaintiff has not submitted any evidence showing that either defendant furnished a consumer report to anyone connected to the debt collection scams,” the opinion said.