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Paid Cash for Car- They pulled credit

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CaroleBaskinBB
Established Member

Paid Cash for Car- They pulled credit

My husband and I purchased a car in cash this evening and we paid via personal check. I checked ahead of time that they accepted this and didn't require a cashiers check. 

I was surprised that after we got there they said they needed to check credit to make sure we are who we say we are because we were paying with a personal check. I asked if this was a hard inquiry and they insisted it would not be. 

Lo and behold I get a monitoring alert a couple hours later saying that they pulled credit.  It appears to be a hard inquiry.  If it is, I am absolutely livid.  Does anyone know if this is standard practice when purchasing with a personal check?

Message 1 of 20
19 REPLIES 19
Brian_Earl_Spilner
Credit Mentor

Re: Paid Cash for Car- They pulled credit

They don't need to pull your credit to verify your identity, but it's a pretty standard excuse to pull your credit. 

    
Message 2 of 20
Creditwiser
Valued Contributor

Re: Paid Cash for Car- They pulled credit


@CaroleBaskinBB wrote:

My husband and I purchased a car in cash this evening and we paid via personal check. I checked ahead of time that they accepted this and didn't require a cashiers check. 

I was surprised that after we got there they said they needed to check credit to make sure we are who we say we are because we were paying with a personal check. I asked if this was a hard inquiry and they insisted it would not be. 

Lo and behold I get a monitoring alert a couple hours later saying that they pulled credit.  It appears to be a hard inquiry.  If it is, I am absolutely livid.  Does anyone know if this is standard practice when purchasing with a personal check?


I would be steaming mad too. It seems to me you're drivers license should have sufficed and if that wasnt good enough, a soft pull should have. I had my credit pulled years ago while on a test drive as they required a copy of my license. From then on whenever I test drive I request the sales persons manager and tell them point blank...." Dont even think about pulling my credit as I'm not authorizing it "

 

Sorry to hear this and I hope it was an SP for you.  They did tell you upfront though , but I would go back there and give them a hard time about it if in fact its a HP. 

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Message 3 of 20
JoeRockhead
Senior Contributor

Re: Paid Cash for Car- They pulled credit

Since you weren't applying for credit, the dealership didn't need to access your credit score and report. And in fact, the FCRA limits access to your credit information in these types of situations. According to the FCRA, credit reporting agencies may only provide information about you to people who are applying for credit in some way such as a loan, Credit cards or other situations such as employment. To verify your ID for writing a check? Never heard of this. 

 

A dealership might also falsely cite the Patriot Act as a reason to run your credit report. But federal anti-money-laundering regulations do not require a dealership to pull your credit on a cash transaction.

 

There are a multitude of ways they could have further verified your identity and/or banking history. Don't blame you for being upset about it.

 

But, congratulations on your new car!

Message 4 of 20
fury1995
Valued Contributor

Re: Paid Cash for Car- They pulled credit

Unfortunately, whatever dealership personnel said to you is irrelevant. If you signed a document that stated permission for credit inquiry, you gave permission and the dealership has that. As @Brian_Earl_Spilner said, it is standard practice for dealerships to use this method when a purchaser is using unverified funds. Equifax, for example is a provider of Red Flags verification. 

 

@JoeRockhead mentioned Patriot Act however all Car Dealerships are governed by the same regulations as any lending institution; Bank Secrecy Act, USA PATRIOT Act, AMLA, OFAC, and Anti-money Laundering / Anti-terrorism Regulations) and are audited for compliance. Most dealers will point to OFAC when requesting identity information when conducting a transaction however your social security number is not required for OFAC. OFAC, specifically is MANDATORY for any transaction, cash or credit.

The dealership should have suggested two options, take your personal check and wait for funds to clear then release your new vehicle to you or...as you suggested, a certified/cashiers check. Dealer personnel were absolutely incorrect for telling you verbally the inquiry would be a soft inquiry. I've never known of a dealer having this capability.

 

@JoeRockhead a "person" presented a driver's license (real ID) and a passport yesterday morning to me to purchase and finance a $60k vehicle. Both ID's looked incredibly legitimate, independently. This "person" had all information necessary. I asked for a second ID to process the transaction and that's when I caught the forgery. I spoke to the REAL owner of the identity after a couple hours of background searches (and discovered his brother is Homeland Security). I had the misfortune of telling him of his dangerous situation without alerting the fraudster. I see these attempts happen personally a couple times a month. ID'S, bank statements, utility bills, paychecks. Don't underestimate the capability of a identity thief or hinder the people who are responsible for protecting their victims. So no way I'd just accept an ID and consider that enough and I don't know if you'd want me to.

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Message 5 of 20
OmarR
Established Contributor

Re: Paid Cash for Car- They pulled credit

@fury1995 you seem to be in the business, so I am curious;

 

If OP had signed a bunch of paperwork with credit check permission on Page 99, and her reports were frozen, I am assuming that the HP would NOT have gone thru?

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Message 6 of 20
Brian_Earl_Spilner
Credit Mentor

Re: Paid Cash for Car- They pulled credit


@OmarR wrote:

@fury1995 you seem to be in the business, so I am curious;

 

If OP had signed a bunch of paperwork with credit check permission on Page 99, and her reports were frozen, I am assuming that the HP would NOT have gone thru?


It wouldn't have gone through, but the purchase would stop while they ask you to thaw your reports. This brings up a double edged sword. Thawing is, for the most part, instant. But, I've had TU take a week to thaw before. Totally screwed up my chances to make a purchase at the sale price. 

    
Message 7 of 20
OmarR
Established Contributor

Re: Paid Cash for Car- They pulled credit


@Brian_Earl_Spilner wrote:

@OmarR wrote:

@fury1995 you seem to be in the business, so I am curious;

 

If OP had signed a bunch of paperwork with credit check permission on Page 99, and her reports were frozen, I am assuming that the HP would NOT have gone thru?


It wouldn't have gone through, but the purchase would stop while they ask you to thaw your reports. This brings up a double edged sword. Thawing is, for the most part, instant. But, I've had TU take a week to thaw before. Totally screwed up my chances to make a purchase at the sale price. 


 

That's what I figured. 

 

That's the part where I have ZERO problems waiting for my check to clear, or simply walking away and going somewhere else.

 EQ=850   EX=845   TU=843       0/24       UTIL=$1    AZEO

Message 8 of 20
Creditwiser
Valued Contributor

Re: Paid Cash for Car- They pulled credit


@fury1995 wrote:

 

 

Dealer personnel were absolutely incorrect for telling you verbally the inquiry would be a soft inquiry. I've never known of a dealer having this capability.

 

@JoeRockhead a "person" presented a driver's license (real ID) and a passport yesterday morning to me to purchase and finance a $60k vehicle. Both ID's looked incredibly legitimate, independently. This "person" had all information necessary. I asked for a second ID to process the transaction and that's when I caught the forgery. I spoke to the REAL owner of the identity after a couple hours of background searches (and discovered his brother is Homeland Security). I had the misfortune of telling him of his dangerous situation without alerting the fraudster. I see these attempts happen personally a couple times a month. ID'S, bank statements, utility bills, paychecks. Don't underestimate the capability of a identity thief or hinder the people who are responsible for protecting their victims. So no way I'd just accept an ID and consider that enough and I don't know if you'd want me to.


I have had dealerships do SP's subsequent to my outlandish HP for a test drive. You may not be aware of it but perhaps its a state to state thing.  The OP was not financing so in that scenario, I get the need to take the steps to verify.  But as mentioned, definitely pay attention to what you're signing.

NFCU Visa 30k | NFCU Platinum 30k | Cap1 QS 12K | Cap1 QS 11.5K | Barclay MC 9k | Delta Gold Amex 30K | Discover IT 14K | CFNA FS 3200 | CareCredit 20k| Paypal Credit 5k | 1 months until BK7 disappears |
( EE from TU & EX )
Message 9 of 20
fury1995
Valued Contributor

Re: Paid Cash for Car- They pulled credit


@OmarR wrote:

@Brian_Earl_Spilner wrote:

@OmarR wrote:

@fury1995 you seem to be in the business, so I am curious;

 

If OP had signed a bunch of paperwork with credit check permission on Page 99, and her reports were frozen, I am assuming that the HP would NOT have gone thru?


It wouldn't have gone through, but the purchase would stop while they ask you to thaw your reports. This brings up a double edged sword. Thawing is, for the most part, instant. But, I've had TU take a week to thaw before. Totally screwed up my chances to make a purchase at the sale price. 


 

That's what I figured. 

 

That's the part where I have ZERO problems waiting for my check to clear, or simply walking away and going somewhere else.


@OmarR   Yep, that's also what identidy theives do when we put them through this process.

 

They threaten to take their "business" somewhere more willing... and fortunately they often find one.

 

And yes, I'm in the auto dealer busniess. I get fraud attempts more than once a month.

August 28, 2023 FICO 8

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August 28, 2023 FICO Auto 8

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Message 10 of 20
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