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Smith Volkswagen Unauthorized Credit Inquiries FCRA Class Action

The Fair Credit Reporting Act (FCRA) regulates the obtaining and use of credit reports, among other things. This complaint alleges that Smith Volkwagen, Ltd. violated that law when it made as many as seven hard credit pulls on a consumer’s credit reports when she was simply looking around at vehicles and had not entered into an agreement to buy one. 

The Unauthorized Inquiry Class is all consumers about whom Smith Volkswagen made credit inquiries, but who had not entered into a written that would allow Smith Volkswagen to make such an inquiry, between June 13, 2014 and the date of final judgement in this case.

Among other things, the FCRA designates a limited number of permissible reasons for asking for a credit report. Those include things like evaluating a candidate for a job, assessing a request for a credit card, or processing a tenant application. Unfortunately, a number of companies these days seem to be jumping the gun and demanding credit information on people who are “just looking” and not yet requesting any kind of transaction with them.

In this case, plaintiff Aaliyah Rogers visited Smith Volkswagen in Wilmington, Delaware to look at vehicles. She did not actually undertake a purchase, say she was going to do so, or sign any papers. As the complaint says, she “never signed any agreement and never agreed to any services or to purchase a vehicle” from Smith. 

Still, she later learned that this visit caused Smith to make as many as seven different credit inquiries—a number which seems excessive even for a legitimate purpose. The credit inquiries are not only an invasion of privacy. Since such “hard pulls” can lower a person’s credit rating, the damage may result in the person’s being charged higher interests rates or even being refused credit entirely. 

The complaint notes that “it is well established that merely inquiring about the possibility of a future transaction does not create a permissible purpose to cause a credit inquiry to occur under Section 1681b of the FCRA.”

In a previous but similar situation the Federal Trade Commission (FTC) decided that a customer who “‘comes to an automobile dealership and requests information’ from a salesman about one or more automobiles” has not done enough to initiate a transaction that would permit the salesman to pull a credit report.

The violation of the FCRA is the single count discussed in the complaint.

Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

Smith Volkswagen Unauthorized Credit Inquiries FCRA Complaint

June 13, 2019

The Fair Credit Reporting Act (FCRA) regulates the obtaining and use of credit reports, among other things. This complaint alleges that Smith Volkwagen, Ltd. violated that law when it made as many as seven hard credit pulls on a consumer’s credit reports when she was simply looking around at vehicles and had not entered into an agreement to buy one. 

smith_volkswagen_fcra_complaint.pdf

Case Event History

Smith Volkswagen Unauthorized Credit Inquiries FCRA Complaint

June 13, 2019

The Fair Credit Reporting Act (FCRA) regulates the obtaining and use of credit reports, among other things. This complaint alleges that Smith Volkwagen, Ltd. violated that law when it made as many as seven hard credit pulls on a consumer’s credit reports when she was simply looking around at vehicles and had not entered into an agreement to buy one. 

smith_volkswagen_fcra_complaint.pdf
Tags: Credit Reports, FCRA, No permissible purpose for request for report