NADA Sues FTC Over Risk-Based Pricing Regulations and Gets… Nada!
June 26th, 2012
NADA argued that car dealers should be exempt from this requirement when they rely on third-party creditors to obtain the credit report. The FTC responded by saying that car dealers are not exempt because they use the credit report even if they do not physically obtain it themselves.
Well, NADA didn’t like that response, so they sued the FTC in federal court. But they didn’t get very far. U.S. District Judge Ellen Huvelle agreed with the FTC, ruling that car dealers who use consumers’ bad credit histories to charge higher interest on car loans must tell buyers about the negative information in their credit report. The fact that the loan is farmed out to a bank or other third party doesn’t matter.
To read Judge Huvelle’s opinion, click here.
For more information on the Risk-Based Pricing Regulations, click here.
(Sometimes called a “Consumer Report.”) A communication of any information by a credit reporting agency that bears on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used to or expected to be used to establish a consumer’s eligibility for credit, insurance, employment, or other purposes. Typically refers to the reports generated by Experian, Equifax, and TransUnion. But see “Specialty Consumer Reporting Agency.”