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#393095 - 07/28/05 06:45 PM
Prescreened offer
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100 Club
Joined: Jan 2004
Posts: 208
PA
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Can someone give me a precise definition of "prescreened offer" or direct me to where I can find it? I couldn't locate anything in the FCRA. Thanks
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#393096 - 07/28/05 10:57 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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An unsolicited offer of credit or insurance based on information from a consumer's credit report.
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#393097 - 07/28/05 11:22 PM
Re: Prescreened offer
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Joined: Oct 2000
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On the Net
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Randy's definition is on target.
The FCRA doesn't define prescreening. That is why you wouldn't find it there.
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#393098 - 07/29/05 09:01 PM
Re: Prescreened offer
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Power Poster
Joined: Aug 2001
Posts: 7,351
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But isn't it described (not by that exact name) at 604(c)(B)(i) as a "firm offer of credit or insurance?" This term IS defined at 603(l).
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#393099 - 07/29/05 09:09 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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In a roundabout way yes - but I think the point was that the term "prescreened offer" is not directly defined. I think we are saying the same thing
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#393100 - 08/02/05 08:55 PM
Re: Prescreened offer
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Diamond Poster
Joined: Nov 2004
Posts: 1,005
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My marketing dept just informed me they are adhering to the pre-screened requirements by changing the word "preapproved" to "pre-qualififed" in our letters sent to members. They think this will null any compliance requirements. Is that true? Does the word change make the letters exempt from the FACTA requirements for prescreen opt out?
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#393101 - 08/02/05 09:08 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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Nope. You are talking semantics here. They are required to make a "firm offer of credit" once they pull the list from the credit bureau - whether they call it a "pre-approved" or "pre-qualified" offer really doesn't make a bit of difference. The opt-out is still required.
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#393102 - 08/10/05 10:02 PM
Re: Prescreened offer
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Anonymous
Unregistered
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Our marketing department wants to send out prescreened credit card offers to current customers based on the fact that they recently obtained another loan product with us. My question is this, if they are basing the unsolicited firm offer of credit on the fact that they just received another product from us, are we required to give them an opt-out? My other question is, if they are looking at a previous credit report used in making the credit decision on the first loan would we then be required to send out an opt-out?
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#393103 - 08/10/05 10:06 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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The answer to your first question is no.
However, while if you base your offer on the fact that you granted them another loan you would be OK, you could not base the offer on any specific information from the original credit report.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#393104 - 08/11/05 04:51 PM
Re: Prescreened offer
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Anonymous
Unregistered
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I just want to make sure I have this right. Even if we have not purchased a list of names for prescreening purposes, the mere fact that we are using a beacon score from an old loan will trigger the opt-out notice? If so, we did not buy a list of names, so do we just use the number and address listed on the original credit bureau?
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#393105 - 08/15/05 03:52 PM
Re: Prescreened offer
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Anonymous
Unregistered
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I am still working on the marketing department and getting them to see how just changing the word "preapproved" to "prequalified" doesn't exempt us from offering the opt-out. In the meantime, if we go with the opt-out short and long notice, does that mean we do not need the existing FCRA disclosure at the bottom of our offer?
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#393106 - 08/16/05 03:23 PM
Re: Prescreened offer
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Anonymous
Unregistered
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I believe the FCRA disclosure is now encompassed in the long notice. The long notice must state the information required by section 615(d) of the FCRA, which it does.
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#393107 - 08/17/05 09:13 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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Quote:
Even if we have not purchased a list of names for prescreening purposes, the mere fact that we are using a beacon score from an old loan will trigger the opt-out notice?
No - you are not allowed to do that. The credit score is a form of a credit report that you certified you obtained through a permissible purpose - i.e., the original credit application.
You would not have a permissible purpose to use that credit score later for marketing purposes.
There would be no opt-out required because use of the credit score in this manner will violate the FCRA.
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#393109 - 08/25/05 12:49 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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Refer to the Gowan Letter . Specifically: "Second, the credit bureau must, pursuant to Section 607(a), require the creditor to "certify the purposes for which the information is sought, and certify that the information will be used for no other purpose." (emphasis added). Because Section 604(a) provides no authority for a creditor (or any party) to use a consumer report for marketing purposes, a creditor would violate its certification by using an existing report in such a manner."
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#393111 - 08/25/05 01:28 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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What do you mean by "soft" credit report? I can't imagine it would be any different.
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#393113 - 08/25/05 09:00 PM
Re: Prescreened offer
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10K Club
Joined: Jul 2001
Posts: 83,227
Galveston, TX
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Why would the consumer loan department be pulling them. If you are talking about on closed-end credit customers - again, refer to the Gowan letter - most likely no permissible purpose. I know some banks that think they can update the credit scores on a reguler basis for all loan customers - that is just not true.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#393116 - 09/20/05 11:42 PM
Re: Prescreened offer
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100 Club
Joined: Jun 2001
Posts: 174
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Yes this would be a prescreened offer needing the proper prescreen disclosures, including opt-out. Also If you are prescreening for a non-credit product, you need to get the customers consent before the prescreening may occur.
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#393118 - 09/21/05 01:29 PM
Re: Prescreened offer
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Platinum Poster
Joined: Jan 2004
Posts: 968
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Thanks guys! Actually, this software is coming directly from the credit reporting agency we use so that shouldn't be a problem. As far as the opt-out goes, can it be verbal? Since they are at our desk when this is being done, can it be as simple as us asking them if they would like to be pre-approved for a credit card?
This Q & A from Lucy G. seems to contradict what you are saying:
http://www.bankersonline.com/compliance/gurus_cmp120103e.html
Any thoughts?
Last edited by Drowning; 09/21/05 02:12 PM.
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#393119 - 09/21/05 04:04 PM
Re: Prescreened offer
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Joined: Jun 2001
Posts: 174
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"While you have the report, you may also review it to cross-sell."
This statement from the Q&A referenced directly conflicts with both the Gowen letter dated April 29, 1999 which states that using existing reports to market products is not permissable, also 604(f) of the FCRA states:
(f)Certain use or obtaining of information prohibited. A person shall not use or obtain a consumer report for any purpose unless
(1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section; and
(2) the purpose is certified in accordance with section 607 [ยง1681e] by a prospective user of the report through a general or specific certification."
What these sources say to me is that you cannot use a report for a non-permissable purpose, such as prescreening for a non-credit product. For deposit products, you must either have the business transaction initiated by the consumer, or get their permission. Prescreening is by definition, not initiated by the consumer, and prescreening using consumer reports is only allowed for credit and insurance products.
If anyone disagrees, please provide your rational and references, I would love to find out this practice is ok, so I can turn the marketing department loose
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This is not a legal opinion or that of my employer.
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