Attempted to take out small loan, was refused the APR upfront

[Anonymous]

A retailer I was making a purchase from offered short-term loans through several different companies, and I thought it would be a good chance to increase my rebuilding efforts. So, I applied. When I received a pre-approval, I asked repeatedly what the APR was and the salesman told me they weren't told. I would find out once I had a contract to sign. The payment, however, would have more than doubled the purchase price in 15 months - $1,500 to $3,300.

He told me they also had a 90 days same as cash option. I asked about that, but it had a 10% buy out amount - over a 30% APR for their "same as cash". To add insult to injury, I was told it was going to be a soft-pull for initial approval and a hard-pull once I accepted. Nope, went straight to a HP. 

I ended up paying cash.

Does all of this sound questionably legal to anyone else? I'm very tempted to lodge a BBB complaint with the financing company, but am not sure if there are grounds for it.

[Callandra]

When you applied, was there anything stating that they were going to pull your credit? You most likely signed for it and there was probably something in there that stated you are authorizing them to pull your credit. The salesman is probably telling the truth about the APR (when I worked at Nordstrom, that information was not on the credit slip that customers were given if approved; they had to call credit services to find out and they will only speak to the customer about it). Honestly, most retail employees don't know the difference in terms of pulls and credit (I know I didn't when I worked in retail and had to sell cards). You could complain but if you signed anything when applying, you might not really have a case. 

[Anonymous]

I did sign something, but it didn't mention pulling my credit report. As far as the APR, I thought truth in lending required the disclosure of the APR prior to the origination of the loan.

Since I posted, I looked up the laws. They fall under a "small consumer loan" provision, which allows an APR of up to 99% (yikes!). Apparently in IL lenders are exempt from nearly all consumer protections for loans of that size, including a cap on the APR at 36%, "buy out" fees, etc. It's quite the racket. 

[Revelate]

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@Anonymous wrote:

I did sign something, but it didn't mention pulling my credit report. As far as the APR, I thought truth in lending required the disclosure of the APR prior to the origination of the loan.

Since I posted, I looked up the laws. They fall under a "small consumer loan" provision, which allows an APR of up to 99% (yikes!). Apparently in IL lenders are exempt from nearly all consumer protections for loans of that size, including a cap on the APR at 36%, "buy out" fees, etc. It's quite the racket. 

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California laws allow higher than that FWIW on that loan size.

If you don't need the cash, they're usually not a good choice for a rebuild, something like Alliant secured loan is generally in all way better for way less money.  Subprime unsecured lending, yeah expect 100% APR's or worse, and don't get me started on the Pay Day lending space.

[RobertEG]

As for approval to pull your credit report, express consumer authorization is not required.

If you initiate a request for credit, the creditor has permissible purpose without any need for additional consumer authorization.  FCRA 604.