## Facts

- Thelma Perry received a mailed “preapproved” credit card solicitation from First National Bank.
- The mailer offered a $250 credit limit, an APR of about 19%, and disclosed multiple fees totaling about $175 that would be imposed upon opening the account.
- Because the fees would largely consume the credit limit, the card would leave roughly $75 of initial available credit.
- The solicitation stated Perry was selected after the Bank obtained and reviewed her consumer credit report through a prescreening process.
- Perry sued under the Fair Credit Reporting Act (FCRA), alleging the Bank lacked a permissible purpose to access her credit report because the mailer was not a “firm offer of credit” but a “sham” given its limited net value.
- The district court denied Perry leave to amend and granted summary judgment to the Bank, concluding the mailer was a firm offer of credit.

## Issues

1. Whether the Bank’s prescreened solicitation constituted a “firm offer of credit” under the FCRA, thereby allowing it to obtain Perry’s consumer report without her prior consent.
2. Whether a court may treat a low-value, fee-laden prescreened offer as outside the FCRA’s “firm offer” definition based on its economic attractiveness.
3. Whether the district court properly denied leave to amend and granted summary judgment based on its interpretation of the FCRA.

## Decision

- The Seventh Circuit affirmed the district court.
- The court held the solicitation was a “firm offer of credit” under the FCRA.
- Because the offer qualified as a firm offer, the Bank had a permissible purpose to obtain Perry’s consumer report for prescreening.
- The court rejected Perry’s “sham offer” theory and upheld summary judgment and the denial of leave to amend.

## Legal Principles

- Under the FCRA, prescreening access to a consumer report is permissible when done in connection with a statutorily defined “firm offer of credit.”
- The statutory definition focuses on whether the offer will be honored if the consumer meets the criteria used to select the consumer, subject to limited verification; it does not require a minimum level of economic value.
- A low credit limit or substantial fees do not, by themselves, negate “firm offer” status if the offer is definite and binding upon acceptance by an eligible consumer.
- Courts applying the FCRA generally will not evaluate the substantive attractiveness of a prescreened offer or impose a judicial value threshold absent statutory direction.

## Conclusion

The Seventh Circuit held that a prescreened credit card solicitation offering a $250 limit with significant up-front fees still qualified as a FCRA “firm offer of credit,” so the issuer’s access to the consumer’s credit report was permitted and judgment for the issuer was affirmed.


Perry v. First Nat’l Bank, 459 F.3d 816 (7th Cir. 2006)