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#2248537 - 02/02/21 05:40 PM Bureau Dispute- Inquiry related to Dealer app
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 527
Midwest
We have a situation where an indirect dealer took an app and sent it out to multiple FI's to find a creditor. The consumer's bureau shows a hit from us for the inquiry related to the credit application that was farmed out to us, which we denied. The customer sent a credit repair letter to us disputing the inquiry, and we referred them back to the dealer, stating we don't have the application and essentially can't help them in resolving the issue. This feels WRONG to me, but I'm struggling to find support that would be similar to our situation.

Don't we have an obligation to investigate and resolve the credit dispute, not send them back to the dealer? Is there any guidance available related to these scenarios?

Any help is appreciated!

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#2248540 - 02/02/21 06:03 PM Re: Bureau Dispute- Inquiry related to Dealer app M&M
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 77,009
Galveston, TX
No - you did the inquiry did you not - so you need to respond to the consumer not the dealer.

And what do you mean you do not have the application. It is past 25 months and you destroyed it already? Did you not communicate the denial to the consumer?

You also need to be review your dealer contract with this specific dealer. You need to make sure that they inform every credit applicant to whom they are forwarding their application too. Without that happening, the minute you communicate your decision back to the dealer, you turned the bank into a credit reporting agency.
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#2248615 - 02/03/21 04:46 PM Re: Bureau Dispute- Inquiry related to Dealer app M&M
M&M Offline
Platinum Poster
Joined: Nov 2003
Posts: 527
Midwest
Randy- I agree with your questions above; they are the same questions I have asked as well. I wanted to get some confirmation that I was thinking through this correctly.

Applications from Dealers are input into a system that shoots the application out to multiple financial institutions. I believe the application should be able to be retrieved from this system by any financial institution who contracts with those dealers using that system, but I haven't been able to confirm that. I also haven't been able to determine how the adverse action process is handled with our indirect team. I'm working through these things.

I know Reg B has allowances for third party applications, but FCRA does not. So for every application we receive through the indirect dealer process- either approved or denied- don't we also need to be providing a credit score notice?

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