I signed up for a business wholesale account at a distributor. I did it online.
Burried in the fine print they claim I agreed to it, but they ran a hard pull against my PERSONAL credit. What I'm upset about is that I didn't ASK for credit. I asked to be billed out on my credit card at time of purchase... So, it doesn't really matter what my personal credit is, no matter what! Putting aside the fact I wouldn't have agreed to it if I had realized, is this type of authorization legal?
When signing up for credit cards, and most things I can think of, I remember seeing a separate initial/signature/checkbox specifically authorizing a hard credit pull. Am I imaging this? Is this just the norm, or is this a norm because it's legally required?
Consumer authorization for an inquiry is only required if the purpose of the inquiry is not one of the reasons set forth under FCRA 604.
The FCRA is structured to avoid the need for consumer authorization if the reason of the request is one or more of the "permissible purposes" set forth under section 604.
Otherwise, new credit and business transactions with a legitimate business need to review the consumer's credit standing would come to a crawl.
If there is a permissible purpose, then there is no requirement that the business advise that they can pull your credit report. Advisements are an optional courtesy, not a requirment.
Thus, the issue is whether their inquiry was based on a permissible purpose.
Consumer initiated requests for credit are always a permissible purpose.
Consumer-initiated business transactions (i.e., not a request for extension of actual credit) are a permissible purpose provided the business has an associated legitimate need to review the consumer's credit history as a part of their evaluation of the business transaction (e.g., rent, utilities, cable, bank accounts, etc.).
They obviously consider that offering billing using one of your credit cards produces a legitimate business need to review your credit report.
That would be a legitimate permissible purpose.