@RobertEG wrote:
The section 604(c) promotional inquiry process was created as a specific service to creditors to enable them to limit their offers to only consumers that are likely to qualify.
The CRAs are permitted to produce a listing of consumers who meet set criteria specified by the creditor. They cannot provide account-specific information to the creditor, but their pre-screening can tell the creditor whether they meet the specified criteria.
On the flip side, receiving firm offers that specify they are being made as a result of a listing provided by a CRA can be useful information to a consumer who is building or rebuilding, and thus opting-out might not be something one would want to do if they might be seeking new credit as part of their rebuilding plan.
This special type of pre-approved offer is a bit more than simply "junk mail."
The price paid by the creditor when using this CRA pre-screening service under section 604(c) is that they must make a firm offer for credit to every consumer on the listing provided by the CRA. A firm offer for credit is defined under the FCRA as an offer that must be met if the consumer applies and is found to still meet the specified criteria.
Consumers can prevent the CRAs from including their name in any listing provided by a CRA by sending the CRA and opt-out election.
The FTC has enforced the requirement that the creditor must send a pre-approval firm offer to all consumers on the listing. They cannot pick and choose.
They have also enforced the failure to grant their firm offer for credit.
The problem the consumer faces on challenging any denail of a firm offer is that they dont know the specific screening criteria provided by the creditor when they obtained their listing. A request for that info undre FCRA 609(a)(1) could be made, but that caan become a hassle, and has a fee associated with such requests for information in their credit file......
There's a lot of good information in the quoted post, particularly the point about the value of pre-screened offers to consumers looking to build credit.
I just want to point out that the difference between a pre-approved offer and a pre-screened offer. A pre-approval guarantees that the consumer will be given an account although it does not guarantee any particular credit limit. Many years ago pre-approvals were quite common but they are much less common today. A pre-screened offer simply means that a consumer was on a list of names supplied by a CRA that match a list of criteria specified by the lender.
In either case a review of the consumers full credit report will be done upon application and the lender will then determine how much credit to extend or whether to extend credit at all.
It's quite common for consumers receiving pre-screened offers to be denied credit after being reviewed by a lender. This can be because of new information added to a report between the time the offer was made and the time the consumer applied or due to the presence of information not covered by the screening criteria that cause a consumer to not meet the lenders standards. There is really nothing a consumer can do after being denied for a pre-screened offer but they will be entitled to a free copy of their report, albeit one without a score.
The laws requirement that a "firm offer of credit" be made would seem to indicate all promotional offers should be pre-approved but lenders apparently don't see it that way.
