Dealer pulled CR for cash sale?!?

[Anonymous]

I purchased a used van this weekend and paid cash.  I was surprised that they requested my SS#, which I gave them.  They explained that they would need to pull my credit because credentials i.e. terrorist?!? info would show up on my report, and they needed to verify that they were selling to an above-board citizen.  (It does show up as a hard pull on Experian.)

Can anyone verify this or explain it to me?

[Anonymous]

Yes completely above board.

they are:

1- Checking the Hawk Report- whih among other things checks for fraud in compiled information.

2- they are comparing information with the physical documents supplied as well.

Its one of those "why do they have to do this this is stupid and unreasonable," which is what everyone says right until an incident occurrs and then everyone says "THEY HAD THE TOOLS AVAILABLE WHY WERE THEY NOT DOING THIS ALL ALONG?"

[Anonymous]

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@Anonymous wrote:

Yes completely above board.

they are:

1- Checking the Hawk Report- whih among other things checks for fraud in compiled information.

2- they are comparing information with the physical documents supplied as well.

Its one of those "why do they have to do this this is stupid and unreasonable," which is what everyone says right until an incident occurrs and then everyone says "THEY HAD THE TOOLS AVAILABLE WHY WERE THEY NOT DOING THIS ALL ALONG?"

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Thanks usmc58555!  That's good to know - I sure appreciate your response.  And +1 on your comment re "THEY HAD THE TOOLS....."

I've never heard of a Hawk Alert and didn't know it existed - seems like such a good thing - and I'm glad to know it's in place.

[Anonymous]

I've never heard of pulling your credit report in an all cash transaction and I've never had it happen. I would have left the second the guy started rambling on about terrorists, etc.

[GregB]

Look at the other recent posts. It is becoming the norm.

I was surprised when I wrote a check for a car in 2004 and they ran my credit, but it seems to have become the norm since.

[Anonymous]

Tell them no and walk. You are ready to pay for a car with cash. They have no legitimate need to dig into your credit. The car dealership is neither a law enforcement agency nor a bank. If they squawk, ask them what federal or state regulation or law requires that you provide it. If they want to run fraud investigations, let them work for the .gov.

There is no legal requirement to give up your SSN or your credit history. If they don't want your money, go someplace else and let them watch you walk out the door and lose a sale.

[Anonymous]

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@Anonymous wrote:

Tell them no and walk. You are ready to pay for a car with cash. They have no legitimate need to dig into your credit. The car dealership is neither a law enforcement agency nor a bank. If they squawk, ask them what federal or state regulation or law requires that you provide it. If they want to run fraud investigations, let them work for the .gov.

There is no legal requirement to give up your SSN or your credit history. If they don't want your money, go someplace else and let them watch you walk out the door and lose a sale.

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1- A dealership may Need your SSN for titling and registration.

2- A dealership will need it for cash transactions greater then $9,999.99.

Under the USA Patriot Act, Auto Dealerships were specifically defined as Financial institutions, and were then forced to maintain a rigorous customer identification program.

A credit application is the easiest way for a dealership to utilize a Customer Identification Program- as mandated by law.

http://www.afasinc.com/ArticleArchive/2005/1-2005%20The%20Importance%20and%20Benefits%20of%20a%20Credit%20Application.pdf

Customer Identification Programs were introduced via the USA Patriot Act. The NIADA tried to get an exemption for car dealerships but it did not go through.

http://www.fincen.gov/statutes_regs/frn/comment_letters/old_comment_files/stockampamlvs.pdf

The NADA also chimed in

http://www.fincen.gov/statutes_regs/frn/comment_letters/old_comment_files/metreyamlvs.pdf

A nice summary of requirements is here:

http://www.m-s-lawyers.com/CM/Publications/PatriotActImpacts.asp

A NIADA summary of how/why and what dealerships must do to remain compliant with federal law is here:

http://www.niada.com/PDFs/Publications/USAPatriotAct.pdf

Information about Customer Identification Programs (CIPs) is available here:

http://www.privacyrights.org/fs/fs31-CIP.htm#2

Please understand that it is MANDATED that EVERY CUSTOMER the dealership sells a car to be checked against OFAC, and that a dealership maintains records of not just the person and the transaction bit also that the records were checked. Not checking on one Customer is a minimum $50,000 fine.

http://www.ofaciq.com/Auto%20Compliance%20Sheet.pdf

Message Edited by usmc58555 on 11-05-2009 08:35 PM