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#608473 - 09/01/06 04:49 PM Adverse Action notification sent in error
Anonymous
Unregistered

Is it a violation of Regulation B, if we sent an Adverse Action notification, declining a consumer credit, when they in fact elected to not utilize the offer that we approved them for because the APR was too high?

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#608474 - 09/01/06 04:55 PM Re: Adverse Action notification sent in error
Al Miller Offline
Diamond Poster
Al Miller
Joined: Oct 2000
Posts: 2,416
Pleasanton CA USA
If they expected a certain rate and you did not approve them at that (or a lower) rate, that is adverse action and a notice was required.

Al
_________________________
Al Miller, CRCM
Opinions expressed are my own and not necessarily shared by my employer.

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#608475 - 09/01/06 04:58 PM Re: Adverse Action notification sent in error
Anonymous
Unregistered

They were shopping rates, and received a better offer from someone else, after we had approved them. When they notified us that they were going with someone else because the APR was too high, we inadvertently sent a model form C-8 declining the customer. This notification was sent in error.

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#608476 - 09/01/06 08:23 PM Re: Adverse Action notification sent in error
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
It should have been noted as approved, not accepted. This is not adverse action. I would likely send a letter of apology to them, especially if the denial listed derogratory information in error.
_________________________
My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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#608477 - 09/01/06 08:23 PM Re: Adverse Action notification sent in error
Anonymous
Unregistered

We realize that is should have been listed as approved, not accepted, and we are sending a letter of apology; however, is there a violation of the Regulation since we did send an AA notice to someone who didn't deserve it?

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#608478 - 09/01/06 08:27 PM Re: Adverse Action notification sent in error
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 80,325
Galveston, TX
No - purely a clerical error.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#608479 - 10/01/06 10:11 PM Re: Adverse Action notification sent in error
Lucy Griffin Offline

Diamond Poster
Lucy Griffin
Joined: Nov 2000
Posts: 1,544
I agree. It is a clerical error and not a violation. In fact, it is never a violation to tell a customer what their credit weaknesses are.

It is safer to send the notice in this situation than not if the customer ever mentioned a target APR. However, if no discussion of rate came up during the application, then your rate is not a counter-offer -- merely non-competitive.

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