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#24363 - 07/18/02 02:53 PM Adverse Action Notice
RGS Offline
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Our local credit bureau is contracting with TransUnion to sell credit reports to consumers. They have asked us if we would be willing to include a marketing brochure about this service when we send Adverse Action notices to customers. We are not going to modify the AA notices at all. I can't find anything that would prevent this practice, but I can't seem to find anything that would condone it either. I'm also concerned about inadvertantly violating other regulations. As far as the brochure is concerned, the credit bureau has told us that they will signify that consumers are entitled to a free copy through TransUnion on their brochure. They are simply offering to sell the credit report so the customer may receive it much more quickly than relying on the TransUnion freebie. Whew..... Is this something we can do or should we merely decline the request politely?
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#24364 - 07/18/02 03:09 PM Re: Adverse Action Notice
rlcarey Online
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I' not sure why the bank would offer free advertising to a credit bureau that wants to sell a credit report to a consumer when they are entilted to receive a free report. To what benefit is this to the consumer and more importantly to the bank?
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#24365 - 07/18/02 04:15 PM Re: Adverse Action Notice
Bear Collector, CRCM Offline
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I agree with RL. In addition, offering to sell an applicant something that they are entitled to receive for free could be both confusing and misleading, particularly to unsophisticated Consumers. I would steer clear of this, and let the credit bureau do their own advertising!
Leslie
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#24366 - 07/18/02 04:15 PM Re: Adverse Action Notice
RGS Offline
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I guess the benefit to the consumer is that they can get the credit report much more quickly. In our area it usually takes 10 days for a consumer to get the report. I'm not entirely sure why we would want to give the credit bureau this service. If we did charge them would that make a difference as far as applicablility to the regs?
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#24367 - 07/18/02 04:32 PM Re: Adverse Action Notice
rlcarey Online
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When you said "If we did charge them...", what to you mean by "we"?
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#24368 - 07/18/02 06:54 PM Re: Adverse Action Notice
RGS Offline
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By "we" I meant the Bank charging the credit bureau for the advertising.
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#24369 - 07/18/02 07:05 PM Re: Adverse Action Notice
rlcarey Online
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Well, I don't think that you are going to find an answer in the regs for a solution to this question. I think it goes back to what benefit does the bank and it's customers derive from such an offer. I agree with Leslie that an offer to sell a credit report when they are entitled to a free report may be confusing to the customer. The downside I see is getting your bank name in some newspaper headline. If you want my personal opinion, I would not get involved. I would classify this a "no" in a risk assessment due to unnecessary "reputational risk".
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#24370 - 07/18/02 07:32 PM Re: Adverse Action Notice
RGS Offline
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Thank you for the insight.
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#24371 - 07/19/02 01:42 AM Re: Adverse Action Notice
Andy_Z Offline
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Sorry to chime in late, but this is a good thread.

I'd stear clear for some of the same references above. I think it is not only confusing to the customer, but it could be misleading. Imagine, "you're denied. You have bad credit, but may not know it. You can get a free copy in 10 days and you could correct it then, but you want the loan now. Pay this money and get a copy now, so maybe we can do the loan tomorrow."

I wouldn't see this as a good thing unless it was handled in a particular way, and I don't know that it would be worth it.
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