topic Re: Possible unauthorized Inquiry in General Credit Topics

Possible unauthorized Inquiry

astrobuckeye — Tue, 02 Mar 2010 17:47:22 GMT

I recently got a security system installed. The company that did the installation ran a credit check and so did the monitoring center. So now I have two inquiries. I don't think those are permissible. Am I correct? I wasn't asking for credit, I actually paid for the installation ahead of time. So would I be justified in sending a Unauthorized Inquiry Letter?

Re: Possible unauthorized Inquiry

fused — Tue, 02 Mar 2010 18:55:02 GMT

Did you sign anything? Check the paper work you have, if any, to see if either of these two companies had a "permissible purpose" to check your credit.

Re: Possible unauthorized Inquiry

Anonymous — Tue, 02 Mar 2010 20:52:33 GMT

Did they do a hard pull or soft pull?

Re: Possible unauthorized Inquiry

Anonymous — Wed, 03 Mar 2010 03:41:26 GMT

@fused wrote:
Did you sign anything? Check the paper work you have, if any, to see if either of these two companies had a "permissible purpose" to check your credit.

True. He would have had to sign a document giving them explicit permission to check his credit. Unfortunately these terms are often hidden deep inside every standard contract.

Message Edited by O6 on 03-02-2010 07:41 PM

Re: Possible unauthorized Inquiry

Anonymous — Wed, 03 Mar 2010 05:41:01 GMT

I agree, but if the OP let's us know wether hard or soft pull then we can pretty much narrow it down to what you said in your last post..

Message Edited by JustinCase on 03-03-2010 12:41 AM

Re: Possible unauthorized Inquiry

Anonymous — Sat, 06 Mar 2010 00:12:43 GMT

As others have said, check the paperwork. They have to explicitly tell you of the credit check.

Did you give them your SSN? I ask because I've read of alarm companies running a credit check WITHOUT being given an SSN.

Re: Possible unauthorized Inquiry

RobertEG — Sun, 07 Mar 2010 02:56:15 GMT

I would not be so quick to conclude that separate, prior witten authority must be granted.

FCRA 604(a)(3)(A) grants a permissable pull to a person who "intends to use the information in connection with a credot transaction involving the consumer." Even though installation fees were paid up front, did you still have a continuing monitoring agreement with them that specifies monthly/quarterly terms of payment?

FCRA 604(a)(3)(F)(i) does not even require that it be a credit transaction, just a "business transaction," that was "initiated by the consumer."

Re: Possible unauthorized Inquiry

Anonymous — Sun, 07 Mar 2010 03:12:04 GMT

FCRA 604(a)(3)(F)(i) does not even require that it be a credit transaction, just a "business transaction," that was "initiated by the consumer."

Ok, kinda confused now, What constitues a hard pull v. soft pull? So "business transaction" would not constitute them doing a hard pull because the consumer did not apply for any type of "credit transaction". My reason for asking for insight is because this would determine weather the type of inquirey would affecrt your score.

Re: Possible unauthorized Inquiry

RobertEG — Sun, 07 Mar 2010 03:43:53 GMT

The FCRA never even mentions the terms "hard" or "soft" pull. This distinction depends on how the inquiry is coded.

What is commonly referred to as a "soft pull" is couched in FCRA language under FCRA 604(c)(2) as to how much information the CRA may provide.

The classic statutory "soft pull" limits the person to only your name and address when it involves an offer for credit that is not intiatiated by the consumer. The so-called unsolicited offers that flood your mailbox.

Other than that, it gets a bit murky. Existing creditors can pull your full CR at any time, under FCRA 604(a)(3)(F)(ii), to conduct an account review. Normal business practives of creditors is to uniformly report these with a code identifying it as such, and FICO thus ignores it in scoring as a so-called "soft pull."

A murkier situation might be, for example, a request you make for a credit line increase (CLI). This is clearly a request for additional credit intiated by the consumer, and thus full access to your CR is authorized under FCRA 604(a)(3)(A). Some creditors will code this in such a way that it is picked up by FICO scoring ("hard pull"), and others report it with code that FICO does not include in scoring ("soft pull").

If you apply for a new apartment, that is a "business transaction intiated by the consumer," and provides access to your full CR under FCRA 604(a)(3)(F)(i), Some will report it with a code that FICO recognizes as a "soft" pull, which others code it such that FICO recognizes it as a "hard" pull.

It is advisable that if you are entering into any type of business transaction, you ask the creditor or postential creditor for advance statement of how they code the transaction when pulling your credit. For the most part, it is not regulated by the FCRA,

Re: Possible unauthorized Inquiry

Anonymous — Sun, 07 Mar 2010 04:03:46 GMT

Wow, great info thanks!!!

Re: Possible unauthorized Inquiry

RobertEG — Sun, 07 Mar 2010 04:52:13 GMT

Not to beat the point to death, but I think this might answer what is your underlying concern.

Take, for example, a situation where you pay all fees up front to set up an account, then have a monthly agreement to pay in advance for services to be rendered that month. So no actual credit is advanced. Is this is "credit transaction intiated by the consumer?"

In my opinion, it is. There is no extension of credit as long as you meet the terms of pre-payment each month. But what if you miss a payment? You then have a debt with the creditor. An extension of credit to you that is beyond their ability to predict in advance. That is why the FCRA uses the term "credit transaction" rather than the more restrictive term of "prior advancement of a specific line of credit."

If that were the definition of "credit transaction," then it would only apply to revolving credit. That is clearly not the case.

It may all sound like legalese, but if you are going to challenge the legality of an inquiry, then it must become legalese.

Re: Possible unauthorized Inquiry

Anonymous — Sun, 07 Mar 2010 17:45:14 GMT

I definitley agree!

Re: Possible unauthorized Inquiry

Anonymous — Tue, 09 Mar 2010 17:56:32 GMT

The FTC has weighed in more than once on §604(a)(3)(F).

Read the Staff Opinion Letters.

Re: Possible unauthorized Inquiry

Anonymous — Wed, 10 Mar 2010 04:28:24 GMT

Good info, thanks Noah!

Re: Possible unauthorized Inquiry

Anonymous — Sat, 13 Mar 2010 19:44:59 GMT

I found a case in the 6th Circuit that narrows the scope of legitimate business need in § 604(a)(3)(F).

Smith v. Bob Smith Chevrolet, Inc., 275 F. Supp. 2d 808 - Dist. Court, WD Kentucky, Louisville 2003

I note that the court has taken judicious notice of informal FTC Staff Opinion Letters, and such I would encourage all to read them for their own benefit. Also read FTC Staff Commentary on the Fair Debt Collection Practices Act. Not just for matters involving inquiries but for all matters involving credit and debt.

A wise man told me, "You can get much further with a kind word and a 2x4 than you can with a kind word alone."

Re: Possible unauthorized Inquiry

RobertEG — Sun, 14 Mar 2010 02:54:00 GMT

I dont disagree with the logic of legal arguments presented in prior FTC or District Court decisions, but unfortunately, neither of these set significant legal precedent.

All FTC advisory opinions, which they incidentally discontinued any issuance of more than ten years ago, are not binding legal opinions. And for good reason. The FTC realized that the executive branch should not be issuing interpretations of the application of the law. That is the responsibility of the courts.

Federal District Court decisions do not become legal precendent even in their appellant area until ratified by their superior Fed Court of Appeals, and even then, are only precendent within that appellant jurisdiction. And unless what is said in any court decision is also directly on point with the specific legal issue upon which the case is decided, it is just dicta, and has not precedential value.

Again, I have no disagreement with the opinions offered, I just urge caution in using them as legal, binding precedent in your case.

Re: Possible unauthorized Inquiry

Anonymous — Mon, 15 Mar 2010 18:23:08 GMT

If an attorney took one's case on contingency, then I'd feel pretty good about using Smith in court. Otherwise, not so much.

In arbitration, or in an ITS letter for unauthorized INQs, then yeah I'd use Smith.