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NADA Statement: FTC Advisory on Obtaining Consumer Credit Reports

12 February 1998

NADA Statement: FTC Advisory on Obtaining Consumer Credit Reports

    MCLEAN, Va., Feb. 12 -- The following is a statement by the
National Automobile Dealers Association:

    NADA has always encouraged dealers to get consumers' signatures before
obtaining credit reports.
    "This FTC clarification is good for consumers, good for dealers and good
for our industry," said NADA Chairman Paul J. Holloway.  "It finally offers
dealers an explanation of a somewhat vague provision of the FCRA and provides
guidance as to when a customer's written permission is necessary.  Hopefully,
this will dispel a concern some consumers have when purchasing or leasing new
vehicles."

    Background
    Yesterday the Federal Trade Commission clarified the circumstances under
which new-car dealers can obtain consumers' credit reports without written
permission.  According to the Commission's interpretation of the newly revised
Fair Credit Reporting Act, a dealer may not obtain a credit report:

    --  when a consumer requests a test drive;
    --  solely for the purpose of negotiating with a consumer; or
    --  when a consumer simply asks questions about prices and financing.

SOURCE  National Automobile Dealers Association