Payment by Check and Credit INQ

[Anonymous]

Someone wants to purchase a car by Check - personal or cashier's - and they are told that the dealer must pull credit (hard INQ).

Legal or Illegal and why?

[SmartCookie]

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Lady_Scarlet wrote:

Someone wants to purchase a car by Check - personal or cashier's - and they are told that the dealer must pull credit (hard INQ).

Legal or Illegal and why?

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http://ficoforums.myfico.com/fico/board/message?board.id=generalcredit&thread.id=47028

There is a huge thread on this with varying subtleties (person was reassured no hard INQ until after the fact) .  I don't think we came to any real official verdict.  I do not see how any INQ relates to the Patriot Act or why one should have to take a double hit if paying with an auto loan check.      

[haulingthescoreup]

It appears that many dealers, out of a combination of ignorance and laziness, have been using credit pulls as a means of fulfilling their requirement of doing a background check, per the Patriot Act. Yet another misreading of law, and because of the name "Patriot Act" and the general climate today, many are reluctant to protest.

[Anonymous]

Background:

I was standing in DH's dealership hearing the manager telling a couple that in order to take a check from them that he had to do a credit pull because the check was only a promise to pay (idiot, ask for a cashier's check).  I called him on it --  and he's pissed and DH is hearing about it.  So I need any statutes/caselaw that someone may know of defining 'permissable purpose'  Section 604, I know but is there any caselaw?

[haulingthescoreup]

I read on another post --by one of the forum veterans, I think-- that this is so new that there really isn't any case law on it yet. I think this was in response to a post that if this was a wrong use of the Patriot Act, someone would have fixed it by now, or something.

And I apologize for the reference to lazy car dealers. At my age, I should know better than to speak in generalities. I am attempting to extract my foot from my mouth, at this very moment.

[Anonymous]

I don't know of any case law that you could use. I would look at the FCRA because it tells you what would be a permissible purpose and what wouldn't be.

[demi]

I paid with a check for my car 2 years ago, 30,000 (stupid, stupid, stupid - pulled money out of my deferred comp because I was afraid I couldn't get a loan - which I am sure of for that much, but boy oh boy, its worth every penny - Love my Gretta the Jetta)...no pull, don't even think they checked if I had the balance in my account.

[Anonymous]

Hauling, no offense taken (you should have heard me last night about unethical car dealers - LOL).  Problem is my name is eventually going on this dealership - and I don't play when it comes to stuff like that.  I myself would have walked out, filed a complaint with the automaker, filed with the State AG, FTC, etc and sued them on top of it just for the principal of it.

There was absolutely no mention of 'Patriot Act' - which reading the Act - it can be done as a form of non-documentary evidence of identity.  My bank did a pull on EQ when I opened a second account (didn't need to because I already had an established relationship with them) but it was a soft pull - this manager didn't even know the difference and was telling the couple that he required it as a condition of taking their check. BUNK!  That is not permissible purpose under FCRA.

When I opened the corporate accounts - they ran the TIN for the business and when asked if they wanted to run the party opening the account the rep stated "no this is an existing customer".  Patriot Act does not require verification of existing customers.

[Anonymous]

I think you're right to be suspicious. If something doesn't seem right, take a pause and look into what you can.

My junior year in college, I picked up a decent paying part-time job, but I needed a car to get to it. I went to a used car lot and was going to pick up a 4yr old Mazda 626 for $6K (would have been paid with a check in full). Not only that, but based on my calculations, it was the right price for me and that situation.

I came home with a 4 yr old BMW318 for $15K! I tried to bring it back the next day, not understanding anything and they just laughed at me. I'm sure my studies suffered from the stress and worry about owning it.

Talk about predators! Since then, I have never trusted car dealerships.

Hmm, do you think maybe that's why they were doing a credit inq? To try to talk whomever into a more expensive car?

Message Edited by PenguinGeek on 10-27-2007 10:33 AM

[haulingthescoreup]

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@Anonymous wrote:
Hmm, do you think maybe that's why they were doing a credit inq? To try to talk whomever into a more expensive car?

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I should have mentioned that; that's another one of the theories as to why they really do it--to persuade the customer to spend more $$$!