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I was in the market for a new car a couple of weeks ago. After requesting on line quotes, I visited several car dealers to renegotiate the deal. As the sell got closer the car dealers asked to run my credit history. That is expected. The thing was that I had already been pre-approved for a car loan through my credit union. It was my understanding that if I had been pre-approved with a car loan there would be no need to have my credit history or score pulled. Several car dealers quoted the Patriot Act as reason for pulling up my credit history making statements such as needing to verify I was not a terrorist and that it was legally mandatory for them to pull up my credit history to verify my identity. So after leaving one car dealer I went online to do some research on blogs and the patriot act. According to my understanding the Patriot Act had no such mandate however could see how car dealers may misinterpret it. Well to make a long story short I had to settle on writing a hand written contract that the car dealer would only run my credit history once for purpose of identity verification. We settled on this after the car dealer manager stated that he would not be able to sell me the car if the car dealership could not run my credit. I would appreciate any verification or clarification on this topic. I ended up buying the car but would like to have this information for future purposes. Thank you.

Answers from the Automotive Experts

Lisa Schomp, Owner/CEO  at Ralph Schomp Automotive All dealerships are required by law to obtain and run a credit report on all customers to verify identity. Lisa J. Schomp

Shelly LoCascio, Dealer Principal  at Irwin Lincoln Mercury Mazda Dianna, Since this a recent goverment rule it can be interpreted several ways with no way of getting clarification, but running the risk of heavey fines if not done properly. At our dealership we do verify ID, SS #, etc. But we do not make it mandatory to run a credit check on customers paying cash or through their own credit. I will tell you we have safeguard rules, red flag rules and the Patriot Act. Shelly

Amy Mattinat, Owner and Author at Auto Craftsmen Ltd I don't know the answer to this question, but I sure am interested in the answer. -Amy Mattinat

Georgia Brown, Director of Education at National Independent Automobile Dealers Association (NIADA) Dianna, I can certainly understand your frustration! You mentioned the Patriot Act, but there is also the Red Flags Rule,which addresses identity theft and creditors or "those who arrange credit" and this includes automobile dealers. They are required by law to have a written program in place to identify, detect, and respond to identity theft. It may have been that the process that they imposed on you was the procedure required by their written program. The federal penalties for not having such a program in place are servere. Please check on the Federal Trade Commission website:www.ftc.gov and use Red Flags Rule in the search box for more info. Georgia Brown Director of Education National Indpependent Automobile Dealers Assoc.

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