The Fair Credit Reporting Act (“FCRA“) allows potential credit grantors to get your name and address from a credit reporting agency (“CRA”) in order to send you a firm offer of credit, if you meet certain criteria. So just what is a firm offer of credit? In the 6th Circuit, that issue is not quite so clear.
Recently, Judge Cleland from the U S District Court for the Eastern District of Michigan held in Phinn v Capital One Auto Finance, that a firm offer of credit does not have to include terms of repayment including an interest rate.
Ken Phinn is a consumer that received a flyer from Capital One Auto Finance. In that flyer, Capital One offered to finance up to $25,000 in credit for an auto purchase to Mr. Phinn. The flyer did not discuss the interest rate, the term or the amount of repayment. Phinn contended that this was not a firm offer of credit as required by FCRA in order to go trolling through a CRA’s records for his name. Judge Cleland held that the offer was firm enough to satisfy the requirements of FCRA and dismissed the case.
I don’t think this case should give the consumer any reason for alarm. Potential credit grantors simply seek the names and addresses of consumers that meet certain criteria. CRAs only return names and address to the credit grantors. CRAs do not give the credit grantors any other information about the consumer. I think this case was more in the nature of a fund raiser for Mr. Phinn as even if there were a technical violation of the FCRA, so what? He was not harmed. The CRA’s identifying him as an individual who met certain criteria did not lower is FICO score.
Again, Judge Cleland wrote another well reasoned and persuasive opinion.