Car Dealer Ran Several Hard Credit Checks Without my Consent – Is that Legal?

When attempting to lease or purchase a vehicle, many individuals travel to local car dealerships, and it is then that some negative behavior may occur that affects the person adversely. If the dealership runs a credit check, it is possible that this activity could harm the person seeking a vehicle when attempting to secure a loan.

It is when a car dealership checks the credit score of an individual through his or her credit report that this is considered a hard inquiry. This is often what causes negative effects or harm to the overall credit score through the check. Others that are looking through these numbers for loans and lending rely on these scores to determine if there is the possibility of the individual not paying what is due. A higher interest rate is usually the outcome if the credit score has been damaged through these hard inquiries. Additionally, it is usually necessary for a company to obtain the consent of the person before a hard check has been performed.

In usual circumstances, a car dealership is required to request permission to run a credit check that could harm the overall credit score of the person seeking a vehicle. A document is produced, and the person signs his or her consent that a check is performed. However, this usually only occurs once and then the matter is completed with progress in obtaining a car or the individual is declined based on a lack of acquiring financing. If multiple checks are performed that lead to damage to the credit score, it is possible something else occurred. It is important to seek the advice of a lawyer for these issues.

Fair Credit Reporting Act Rights

While individual consumers are protected under the FCRA, there are various instances where the credit report may be accessed. If there is a court order, the credit may be checked. Some companies are provided written permission from the person to do so on his or her behalf. If a company may become a creditor, an employer or has been a creditor previously, the person’s credit may be checked. Insurance and government agencies are also afforded these rights. However, car dealerships and some creditors, the express permission of the individual is usually required before the access is accomplished.

However, if the person seeking a deal with the company has not provided permission, the business is liable for damages that are caused due to these actions. In usual circumstances, a minimum of $1000 is often the base they must pay out when it has been determined that the dealership is responsible for the incident. Other fees such as those needed for the lawyer, punitive damages and other amounts may be awarded when the judge has deemed it. Any additional access to the credit report without consent through a car dealership could be included in these incidents.

The Gray Legal Area

When a dealership has entered into an arrangement with a private citizen, there is the possibility that one of the documents that is signed provides consent for a hard credit check. Typically, this is for a one time check that may ding the overall credit and then the deal may finalize and progress to the next step. However, the gray area in these matters involves other checks by the financing company or another entity connected to the dealership. If the document provides a blanket check for any number of times, the dealership is within its rights to perform each assessment.

Many that seal a deal with a car dealership do not read the paperwork before the vehicle is provided. If the documentation permits unlimited checks to the credit, it is possible the owner of the new lease may have no claim in court or against the dealership directly. It is crucial to recheck the papers he or she has signed. Many are specific enough that a single or simple report is all that is needed to proceed with the financing. When this is the case, the leaseholder may continue with action against the company. He or she should then hire a lawyer to determine what to do next.

Legal Services in Credit Checks

Before continuing through with a claim, a lawyer should be hired to determine if the individual’s rights have been violated. It is only when this has been confirmed that a claim may progress and damages may be awarded with a successful case against the dealership.

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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.
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