Effective January 1, 2011, the Federal Trade Commission (FTC) enforced the Risk-Based Pricing Regulation which may affect every dealership whether or not that dealership pulls a credit report on their customers. The regulation is intended to improve the accuracy of credit information by alerting those consumers who may have negative information existing on their credit file. Consumers are provided their score, how their score ranks nationally and some educational information on how to obtain a copy of their report and what to do if they find inaccurate information. This regulation is meant to complement the FCRA Adverse Action notice requirement which requires automotive dealerships to provide credit report information to those consumers whose credit applications were denied or did not qualify for the dealership’s best terms based on information contained within their credit report.
Following the National Automobile Dealers Association (NADA) and National Independent Automobile Dealers Association (NIADA) recommendations, 700Credit’s free solution uses the Exception Notice option, otherwise known as Model Form B-4 and Model Form B-5, for those instances where a score is not returned on the consumer. Anytime a credit report is retrieved through the 700Dealer System, a Risk-Based Pricing Score Disclosure Exception Notice is automatically generated. The Exception Notice must be delivered to the customer at or before consummation of the credit transaction or as soon as possible after the credit score has been obtained.
Additional features and options include: