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HOT TOPICS
2015 GNYADA Membership Directory
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10. Be able to show customers how they can quickly thaw their frozen credit files. For customers who
have placed security freezes on their credit files, have a sheet of paper available containing the phone
numbers of all three national credit bureaus (Equifax, Experian and TransUnion) for the customer to call to
temporarily “thaw” their credit files so that you can pull a credit report on the customer. This will require
the customer to have available the PIN issued to them by the credit bureau when they first froze their
credit file. The credit bureau is not obligated to thaw the credit file without the PIN. If the customer does
not have the PIN, perhaps they can call someone at their home to get it. If the customer has their PIN,
they can “thaw” their credit file and make their credit report and credit score available to you in a matter
of minutes by simply calling the phone number for each credit bureau. It is not advisable for you to take
the customer’s PINs or offer to make the calls for the customer, although you can give the customer access
to a private phone in the dealership if necessary. If you spot deliver or sell a vehicle to a customer with
a frozen credit file, proceed with extreme caution. Consider obtaining additional information, such as a
pay stub, bank statement or other evidence of the customer’s creditworthiness, and be especially diligent
when verifying the customer’s identity. Few lenders will purchase a contract for a customer on whom they
cannot pull credit.
The New Jersey Division of Consumer Affairs reached a settlement of $1.8
million, plus consumer restitution, from eight related auto dealerships and their
owners, all for deceptive sales tactics at the dealerships.
The two principals of the dealers were accused of failing to disclose existing mechanical defects or past damage
to used cars; charging for supplemental warranties and other costly aftermarket items without customers’
consent; and failing to honor the negotiated or advertised prices for the vehicles. The two principals had settled
similar allegations in 1999.
In addition to bait-and-switch tactics and add-on sales without consent, consumers alleged that the
dealerships failed to refund deposits in a timely manner after consumers either canceled sales or were denied
financing; advertising cars without including required information such as a VIN, thus preventing consumers
from being able to check the vehicle’s history of damage and use; and failure to provide consumers with titles
and registrations in a timely manner.
In 1999, the two principals agreed to pay $450,000, including $250,000 as a compensatory fund for consumers,
to settle similar complaints by consumers. The new settlement requires a payment of $1.8 million, which
includes $1,733,059 and $66,941 to reimburse the state’s investigative costs and attorney’s fees. In addition
to that payment, the defendants must work to resolve the complaints of 45 consumers who documented their
allegations with the Division of Consumer Affairs. Finally, under the settlement, the defendants must, at their
own cost, hire a state-approved compliance monitor for two years to oversee the defendants’ compliance with
all applicable federal and state laws, rules, and regulations, as well as review the defendants’ internal policies
and procedures to make any changes, facilitate the resolution of additional consumer complaints, and provide
quarterly written reports to the New Jersey Division of Consumer Affairs.