Inquries, PP and the CIA Warning

Inquiries - soft and hard, Permissible Purposes - lotsa discussion around, lotsa confused people. So, lets get started ...

• 
  Disclaimer: I am not a lawyer. I do not claim to be an expert. Do not take
  this post as a legal advice. This is just my interpretation of the law.

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  PART I: "Soft" or "Hard" Inquiry?
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According to Equifax, "[color=0066FF]the "hard" or voluntary inquiries were generated because you authorized the companies listed to request a copy of your credit report[/color]". PrivacyGuard adds that "[color=0066FF]When you apply for any type of credit (such as an auto loan, credit card, department store card, or mortgage), the lender considering your credit application checks your credit history. This is recorded in your credit report as a 'hard inquiry.'[/color]".

According to Equifax, "[color=0066FF]The 'soft' or involuntary inquiries were generated for a number of different reasons. These inquiries reflect either your request for your own credit report or a company considering you for an offer of credit, such as a credit card solicitation. These inquiries do not appear on the credit report that lenders see.[/color]"

According to Equifax, there are several types of "soft" inquiries:
  - Promotional [PRM], when your name and address were given to a lender for credit offers, such as credit card solicitations
  - Account Monitoring [AM] or Account Review [AR], when one of your creditors performs a periodic review of your account
  - Internal [ID], [ACIS], [UPDATE], the CRA's activity in response to our contact with them for either a copy of our CR, or a request for research

In one of his posts Butch says that "[color=0066FF]Whether it's a hard or a soft pull makes no difference at all. They still get your full report. The only thing that distinguishes the difference between soft or hard is the fact that soft's are not viewed by potential creditors and hards are. Promotional inquiries, on the other hand, only pull up header information not the complete credit report.[/color]"

So even if it's a soft inquiry and doesn't harm our score, it still could violate our rights, because our credit information has been given to a person, not authorized by us to have it.


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  PART II: Permissible Purpose
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The apllicable law is the Fair Credit Reporting Act [FCRA] [15 U.S.C. § 1681b]

Lets find out when a person has the right to obtain a consumer report.

• (a)(2) In accordance with our written instructions (there is an interesting interpretation of the electronic transmission of consumer authorization here).

• (a)(3)(A) In connection with a credit transaction involving the extension of our credit, or review or collection of our account. Furthermore, FCRA defines in which cases a CR could be obtained if the transaction was not initiated by us - if we (c)(1)(A) authorize the CRA, or (c)(1)(B) the transaction consists of a firm offer of credit or insurance. This would be the PRM, mentioned above, which is limited (c)(2)(A), (c)(2)(B), (c)(2)(C) to give only the header information (also known as "prescreening" - to obtain a list of consumers from a CRA who meet certain preestablished criteria).

• (a)(3)(D) I've read here about CRAs using this one as an excuse. They give you one part of it: "[color=0066FF]intends to use the information in connection with a determination of the consumer's eligibility for a license or other benefit[/color]". When you add the rest of it: "[color=0066FF]granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status[/color]" the meaning becomes totally different, so don't get confused.

• (a)(3)(E) Another soft inquiry - AR.

• (a)(3)(F)(i) If we initiate the transaction. That would be a hard inquiry.

• (a)(3)(F)(ii) Another soft inquiry - AM.

• (c)(3) Clearly states that if the transaction is NOT initiated by us, the CRA is not allowed to give anybody the record of inquiries. For example, if your landlord pulled your CR WITH the inquiries, the CRA is in violation of FCRA.

• Talking about initiation, here is the FCRA's definition: "[color=0066FF]§ 1681a (m) The term 'credit or insurance transaction that is not initiated by the consumer' does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of - (1) reviewing the account or insurance policy; or (2) collecting the account. [/color]"

The summary:

â?¢ When the person is authorized to receive the CR by us (mostly when we apply for a credit), this is a "hard" inquiry, the PP is established.

â?¢ Without our knowledge, there is a hard inquiry PP only if ordered by the court, or for collection, or in connection to a child support case, or for employment purposes.

â?¢ Without our knowledge, there is a soft inquiry PP for PRM, AR, and AM.


The confusion:

â?¢ Paying off the balance does not take out the hard inquiry PP. We still have an account with the OC.

â?¢ Closing the account takes out the hard inquiry PP, but leaves the soft inquiry PP for PRM. As I remember it was Marie who said "No account - no PP". I beg to differ ... the fact that you have closed the account with some OC, does not mean that the same OC cannot do presreening test to offer you another account. But, if they do a hard inquiry after you close the account (assuming you have not applied for another credit with the same OC), the CRA is in violation of FCRA.

â?¢ Now get ready for the surprise and remember - this is MY interpretation of the law. I've seen people here complaining that the OC has done a hard inquiry. The OC can do as many hard inquiry REQUESTS as they want. It's the CRA obligated by FCRA not to give the information away.


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  PART III: The CIA Warning
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Don't go to the bathroom on October 28th. CIA intelligence reports that a major plot is planned for that day. Anyone who takes a poop on the 28th will be bitten on the ass by an alligator. Reports indicate that organized groups of alligators are planning to rise up into unsuspecting American's toilet bowls and bite them when they are doing their dirty business.

I wouldn't believe it, but I got this information from a reliable source.

It came from a friend of a friend whose cousin is dating this girl whose brother knows this guy whose wife knows this lady whose husband buys hot dogs from this guy who knows a shoeshine guy who shines the shoes of a mail room worker who has a friend who's drug dealer sells drugs to another mail room worker who works in the CIA building. He apparently overheard two guys talking in the bathroom about alligators and came to the conclusion that we are going to be attacked.

So it must be true.



P.S. Your comments, corrections, notes, etc. will be highly appreciated ...

 

I did say right above it that "[color=0066FF]Paying off the balance does not take out the hard inquiry PP. We still have an account with the OC.[/color]" But, you are right that saying just "[color=0066FF]Closing the account[/color]" is not clear enough. My mistake, thanks ...

It *is* subjective. But, when an OC can pull a full report not in violation of FCRA? Only if you have an account with them (except PRM). In all other cases the CRA will be in violation.

I am not sure I understand that ...
    1. I haven't seen any clause restricting anyone from requesting a CR.
    2. Liable to the CRA? Yes, indeed. Liable to me as a consumer? I haven't seen that either ...

I mean, I don't see any way to take you to the court if you have requested my CR without PP. Would you point me to the FCRA section about that?

 

Re: Re: Inquries, PP and the CIA Warning

• Learning from the best, Butch. I never thought I'd be able to pull something like this, if it wasn't for this board and people like ... well, no names ...
  
  Geez, two weeks ago I didn't know if CA can take my computer away when I go for a BK! Forget that, I didn't know what BK meant ...

 

Re: Re: Re: Inquries, PP and the CIA Warning

• 
  Sounds good to me ... but, it says "[color=0066FF]in the case of liability of a natural person[/color]", so I think there must be a clause somewhere to define that this person is liable for it, i.e., to create the case.
  
  I'm not saying you're wrong, I'm just trying to understand it ...

 

Re: Re: Re: Inquries, PP and the CIA Warning

• 
  Got it ... you're talking about § 616(a)(1)(B), but that's what I was looking for:
  
  [color=0066FF]§ 616(b) Civil liability for knowing noncompliance. Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.[/color]

 

Re: Re: Re: Re: Re: Inquries, PP and the CIA Warning

• Anyway, I got what I wanted, thank you!