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Super Contributor
MidnightVoice
Posts: 8,158
Registered: ‎03-25-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!



uptomyneck wrote:
 
 
All of this is accomplished by running your credit. 

But can be established better other ways.  If my passport is good enough for the US government it should be good enough for the car dealer.
 
A government issued photo ID is all that is required to fly - that should be enough
The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

[ Edited ]


uptomyneck wrote:
Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338
As it pertains to car sales defines dealerships as financial institutions because they are originating loans. 
 
Title III of the USAPATRIOT ACT aka the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 requires all financial institutions to verify the identity of an individual opening and account with their institutions.
 
They are also required to verify your identity and cross check it with the Office of Foreing Assests Controls' list of Specially Designated Nationals (who are prohibited from conducting financial transactions in the United States)
 
I can't site the statute, I think it was the RICO act, but certain large cash transactions (including car sales) have to be reported to the Internal Revenue Service.
 
All of this is accomplished by running your credit.  Car dealerships don't have a choice.  You might find a disreputable business that won't run your credit, but if they don't they are liable and can be personally prosecuted under federal law.
 


Message Edited by uptomyneck on 10-03-2007 10:20 PM

 
NONE of this is accomplished by running a credit check.  It can be accomplished by cross referencing you with a public records data base (ie Lexis Nexis)  and using whatever reporting means the Internal revenue Service utilizes (which is probably quarterly or monthly sales reports).  The government doenst move that fast. Even now. There are no terorists databases in the CRAs that would be a separate entity though the government is always welcomed to subpeona those records under court order.
 
Under the FCRA NO can run your credit file without permissable purposes and permissable purposes in this case would be to acquie new credit.



Message Edited by Brammy on 10-03-2007 10:26 PM
New Contributor
uptomyneck
Posts: 51
Registered: ‎06-07-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

[ Edited ]
All of it is accomplished through a credit check. 
There's a difference between the databases car dealerships pull/send info to than a regular credit pull.
See Tuscani's post on auto scores vs. regular scores.
One of the services included by the CRAs to car dealerships is taking information and reporting it to the appropriate agencies.  That way car dealerships have to submit one form to one database, not several. 
You don't have to be applying for credit.  Technically they need your signature on an application to run your credit.  But if you don't sign the credit app they can't fufill their due diligence under federal law.
So, if you don't sign the app legally, they can't sell you the car.  I've seen it happen.  A customer got ticked off because he wanted to pay cash, no credit app.  The general manager looked up and said, "Sorry dude, no credit app, no car.  One car deal is not worth losing my franchise and getting tossed in jail."


Message Edited by uptomyneck on 10-03-2007 10:38 PM
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

[ Edited ]


uptomyneck wrote:
There's a difference between the databases car dealerships pull/send info to than a regular credit pull.
See Tuscani's post on auto scores vs. regular scores.
One of the services included by the CRAs to car dealerships is taking information and reporting it to the appropriate agencies.


 
Where do you get this?  There is a difference in the types of scoring models that auto dealerships use, not the source and to quote your original post, it is only in the case of loan origination that they hava right to pull it. If there is no lon there is no PP BUT they may have to report under graham leachy but not through the CRAs
 
BTW ownership of vehicles is established though liscensing



Message Edited by Brammy on 10-03-2007 10:29 PM

Message Edited by Brammy on 10-03-2007 10:31 PM
New Contributor
uptomyneck
Posts: 51
Registered: ‎06-07-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

[ Edited ]
GLB Act as applied to car sales defines them as a financial institution therefore title III of the USAPATRIOT Act applies to them.  It doesn't necessarily mean you have to be applying for a loan in that transaction.
I worked in car sales for 3 years and had to sit through 4 hours of classes on this paperwork at every dealership I worked at (4 all together).  As car salesman we were supposed to shut up and refer all the questions to the finance managers.  But, we still had to know what was going so we didn't tell the customer something we weren't supposed to- like the credit app is up to the manager if you pay cash.


Message Edited by uptomyneck on 10-03-2007 10:39 PM
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

[ Edited ]


uptomyneck wrote:
I worked in car sales for 3 years and had to sit through 4 hours of classes on this paperwork at every dealership I worked at (4 all together).  As car salesman we were supposed to shut up and refer all the questions to the finance managers.  But, we still had to know what was going so we didn't tell the customer something we weren't supposed to- like the credit app is up to the manager if you pay cash.


 
Wha?  There is no credit app if you pay CASH!!!  A lot of customers walk in with a blank check from their own financial institutions which are the ONLY people who have a right to run their credt.  What your dealership taught YOU was what they WANTED you to do because if the salesman gets the financing both the dealership and the salesman gets a cut.
 
Its an old trick to run the custy's credit and try to make them a deal they can't refuse.  GMAB!!!!!
 
Very surprised that both you and your dealership haven't been writing out a lt of 1000.00 checks for each violation/
 





Message Edited by Brammy on 10-03-2007 10:40 PM
Senior Contributor
imducky
Posts: 3,432
Registered: ‎08-27-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

hey it just hit me (thanks brammy). i had financing lined up and the sales guy beged me to run my credit so he "could get me a better deal". i said no way take the check from wells fargo and i'll take the car, or i'll keep looking that's what the internet is for.
 
he took the check, i got my car.
New Contributor
uptomyneck
Posts: 51
Registered: ‎06-07-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!

Dealerships-plural.  Different parts of town, different companies, different manufactures, differerent corporate counsels giving the classes we were required to take before we went out on the floor.
Like I said, you may find a dealership that doesn't follow the letter of the law, but it is the law.
Senior Contributor
imducky
Posts: 3,432
Registered: ‎08-27-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!



uptomyneck wrote:
Dealerships-plural.  Different parts of town, different companies, different manufactures, differerent corporate counsels giving the classes we were required to take before we went out on the floor.
Like I said, you may find a dealership that doesn't follow the letter of the law, but it is the law.


you know actually now that i think about it all i had was a photo copy of the check and a letter of credit from wells fargo, of course they called wells fargo and made sure everything was cool. my point being i drove off the lot with a brand new 2005 jeep liberty from a five star dealership with a copy of a check, and they didn't pull my credit.
Moderator Emeritus
Brammy
Posts: 5,436
Registered: ‎03-10-2007

Re: Car Dealer Said they LEGALLY have to do a Hard Inquiry Even if paying cash!



uptomyneck wrote:
Dealerships-plural.  Different parts of town, different companies, different manufactures, differerent corporate counsels giving the classes we were required to take before we went out on the floor.
Like I said, you may find a dealership that doesn't follow the letter of the law, but it is the law.


 
You are still comparing apples to oranges.  If I come in with no money and need you to get my financing, of course you run my credit.  BUT YOU HAVE NO RIGHT TO SEE WHAT IS IN MY CREDIT FILE WITHOUT M PERMISSION.  Of course car dealerships are the most upstanding of all businesses.
 
If my bank has already got my financing, NO you do't run my credit.  Please that's what this board is for to prevent consumers from falling prey to this type of mess.


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