[snowang]

Does the dealer (not the finance department, but Sales Manager) have the right to require me to file a credit application when I am not financing with them?

We just purchased a pretty expensive Ford a few months ago. I do remember filling personal information in a credit application even though we didn't finance with Ford. But I think we left the SSNs blank. I don't remember agreeing to a credit pull and I didn't see any pull on my credit report afterwards.

The Chrysler dealer we visited today insisted that we filed the credit application, even though we were very clear we were not financing. First the salesperson said we didn't have to provide SSN and they wouldn't pull our credit. Then he came back and said he would need the SSN and they would soft pull. We declined financing (and the additional $500 rebate) because we didn't want our credit scores to be affected and didn't want to spend extra time with the usually shady financing department. It didn't make sense to us that they would still pull our credit. We asked him to double check. Then the sales manager came over waving a sheet of paper with our names at the top of each block, the so called OFAC Report. He said our names resulted in "OFAC hits" and he needed to do a hard pull to verify our identity. We looked at the report and none of the names listed were remotely similar to ours. The addresses had no match, either. We quickly checked online and decided that this was probably not legitimate. We fought back and the SM started becoming aggressive and said they couldn't sell us the car without pulling the credit because they needed to make sure we were not engaged in money laundering. At that point I've had enough and walked out.

All this happened after the same Sales Manager played bait and switch and raised the price when we showed up for paperwork, even though I have clear email proof of the OTD he agreed to and the rebates I qualified for. He also played tricks on the Sam's Club certificate, saying it didn't work the first time we visited. Turned out to be total BS. I was honestly astounded by how low this Sales Manager could go to get a few hundred more from us. When we bought the Ford, we negotiated price via email and finished paperwork in 45 minutes. What a difference!

I am wondering about your experience with a cash or non-Chrysler financed purchase. Were you asked to fill out the credit application, too? Did you have to provide SSN and agree to a hard pull? Is it legitimate for dealers to request hard pull when there are the so-called "OFAC hits"?

 

[snowang]

Wow, I just did some additional research on OFAC and tried the public OFAC SDN database myself. I found out that the Sales Manager must've set an extremely low name match score to get those two hits. Probably 50% or lower. My husband and I both have pretty common last names and surely there would be lots of hits. That would probably happen to every single one of his customers. But if any of our other information (address, birth date, etc.) was put in, it would result in absolutely no hit no matter what match score you set.
That is very disturbing. I am wondering what his motive is behind all this. Maybe he's simply extremely incompetent (couldn't figure out Sam's coupon, couldn't run OFAC properly, couldn't get his numbers straight......), maybe there is something shadier going on...I am glad I didn't give them my SSN. But I did just see a new credit pull from Universal Credit, not sure how that happened.

 

[Norbert]

Run from that dealer!

 

[Joyxpac]

No honest dealer will insist on having your SSN when you are not financing. This tactic immediately makes me think that he's involved in selling SS numbers for identity theft. There is no legitimate reason he needs your SSN. I'd turn him in for suspicious business tactics and buy my cars elsewhere.

 

[Cwuwlaw]

Edmunds article on the issue says using more than $10k in cash requires providing SS#, but running credit requires permission. If it is wanting to run a credit report, it may just be protecting against identify fraud or it may be trying to get you to finance...

I am too new to link, but you can google. Title of article is car-dealership-credit-report-scams-and-the-patriot-act.

 

[dmg2010]

Buying a car? Don't fall for the Patriot Act credit check scam

 

[tsax6010]

I used to work at a Chevy dealership years ago, and know that SS# is required for any cash transaction over 10K because it has to be reported by law to the IRS to investigate for money laundering. It was also common for customers using their own financing (credit union, etc.) to be required to submit for a credit check for the dealer to release the vehicle based on credit worthiness, since they technically have not received payment in full yet. Credit worthiness is used as a subjective risk assessment that the customer will follow through with the outside financing.

 

[snowang]

I used to work at a Chevy dealership years ago, and know that SS# is required for any cash transaction over 10K because it has to be reported by law to the IRS to investigate for money laundering. It was also common for customers using their own financing (credit union, etc.) to be required to submit for a credit check for the dealer to release the vehicle based on credit worthiness, since they technically have not received payment in full yet. Credit worthiness is used as a subjective risk assessment that the customer will follow through with the outside financing.

Thanks for chiming in tsax6010 and everyone else! A couple follow-up questions:
1. If I am paying $5000 via credit card (maximum allowed) and bringing in a cashiers check for the rest, would a dealership still have ground to do a credit pull? Since I am not financing and thus not getting the $500 rebate, it just doesn't make sense to me that my credit still has to be pulled. I have excellent credit and that's through years of cultivating and not willing to sacrifice a hard pull for nothing.
2. Any insight on the OFAC hits? What are the guidelines for most dealers when they query a customer in the database? Are they required to set the name match score lower than say 80%? I see additional verification steps from 700dealer, which is the tool this dealer used. https://www.700dealer.com/OFACINSTRUCTIONS.pdf. Going through these steps would definitely have cleared our names without a hard pull. It was ridiculous that the OFAC report he laid in front of us listed a match that has three same letters as my last name and entirely different first name. When we pointed that out to him, his attitude was like a hit is a hit, nothing he could do about it.

We felt humiliated and insulted the way he played out this whole game. He threw the OFAC report in front of us as if he were interrogating criminal suspects. His words and body language really angered us. We are law biding citizens and don't deserve this type of treatment when we are ready to shed more than $40k for a vehicle!

 

[lynhnn]

I think the dealer loves to run your credit report to do background check who they are dealing with if the deal is taking longer. It's easier for them (to save time and resource) to know the financial picture of the customer. If you insist that you'll pay off with cash or cashier check then they should stop from asking. However, at the end, when they give additional $500 discount, they said buyer must apply for a minimum loan with Chrysler Capital to get that.

 

[tsax6010]

In my experience it can take multiple days for even a cashiers check to clear, and there are plenty of scams involving cashiers checks (just place an ad on Craigslist and wait for the scam attempts to begin). I would think a dealer would want some assurance in the name of risk mitigation above and beyond your word, and credit worthiness is often used to determine this. I think it would be reasonable though to work with the dealer to postpone physical delivery of the vehicle until all funds have fully cleared as a means to bypass this.

I would hope that dealership management would do a better job of relating their risks, concerns, and processes to help explain the requests/requirements, but as an Auxiliary Police Officer I can attest that not everyone in a service based role has the personality and communication skills to be successful at their job. At the end of the day if you are unhappy with the treatment you have received I would highly consider going to another dealership or escalating your concerns to higher management/owner of the dealer you are currently working with.

 

[Joyxpac]

The last 3 cars I've bought I've paid for them with personal checks. 3 different dealerships and not one of them had an issue with that. I drove off with the cars and I know they didn't check my bank balance. Is there a factor that no one has addressed here concerning discrimination against snowang? I'm a white female and they accept my personal check without batting an eye then this dealership seems to be going overboard to extract snowang & his wife's social security numbers. Seems wrong.

 

[cue003]

Is the 5K credit card piece the max allowed by the dealer? I was thinking of possibly putting it all on credit card and paying the credit card off. That way I get the credit card points. Good to know about credit for anything over $10K cash with requiring more info etc.

Does a wire transfer to the bank also have the same requirements? Then there is no liability on the dealer with releasing the van or maybe need the credit check etc.

 

[Joyxpac]

Is the 5K credit card piece the max allowed by the dealer? I was thinking of possibly putting it all on credit card and paying the credit card off. That way I get the credit card points. Good to know about credit for anything over $10K cash with requiring more info etc.

Does a wire transfer to the bank also have the same requirements? Then there is no liability on the dealer with releasing the van or maybe need the credit check etc.

I had the same idea in 2009 but the dealer at that time limited my credit card payment to $2500.

 

[tsax6010]

I had the same idea in 2009 but the dealer at that time limited my credit card payment to $2500.

The dealer, like pretty much any other sales channel with a merchant agreement to accept V/M/D/A has a fixed percentage they have to pay in fees for each transaction, typically around 3%. Dealers limit the amount you can put on a credit card to reduce their potential for profit liability.

 

[snowang]

Is the 5K credit card piece the max allowed by the dealer? I was thinking of possibly putting it all on credit card and paying the credit card off. That way I get the credit card points. Good to know about credit for anything over $10K cash with requiring more info etc.

Does a wire transfer to the bank also have the same requirements? Then there is no liability on the dealer with releasing the van or maybe need the credit check etc.

You probably won't find a dealer that would accept a full payment on credit card for a new car. The maximum we were allowed on the Ford was also $5000 last year. But hey better than nothing. I still get like 7500 points on my Chase Freedom unlimited. Wire transfer is a good idea. It costs some (maybe $30-50). Don't know if dealers can relieve me from jumping the credit hoops though.

 

[snowang]

The last 3 cars I've bought I've paid for them with personal checks. 3 different dealerships and not one of them had an issue with that. I drove off with the cars and I know they didn't check my bank balance. Is there a factor that no one has addressed here concerning discrimination against snowang? I'm a white female and they accept my personal check without batting an eye then this dealership seems to be going overboard to extract snowang & his wife's social security numbers. Seems wrong.

Yes, the word discrimination did cross my mind when I couldn't sleep last night because of the ordeal. I have a lot of faith in people and didn't want to think that way unless I had any solid proof. When the SM said that he had to "verify our identity and make sure we were not doing money laundering", we told him that our driver's licenses proved our identity (name, birthday, address). Would he have pulled this crap with someone with different demographics? Maybe, maybe not. I have not seen an online complaint on the dealership or him on the same OFAC hit issue.

Oh, Joyxpac, I realized I never mentioned to you that I am the wife in the house And the Pacifica will be my ride. But thanks a lot for your earlier messages and the mental support here.

 

[snowang]

I think the dealer loves to run your credit report to do background check who they are dealing with if the deal is taking longer. It's easier for them (to save time and resource) to know the financial picture of the customer. If you insist that you'll pay off with cash or cashier check then they should stop from asking. However, at the end, when they give additional $500 discount, they said buyer must apply for a minimum loan with Chrysler Capital to get that.

Yeah. It was close to 8:30pm and my kids were sent to the neighbors so we could spend time with the dealer and get the car back. The SM made each small thing burst into a 1 hour back and forth. Maybe that's just the tactic. I am thinking maybe I should just go ahead with Chrysler financing and get the additional $500, if the next dealer is still gonna pull my credit no matter what verified payment method I provide. But who knows what other crap the financing department will pull on me. I am missing the Ford dealership :crying:

 

[snowang]

In my experience it can take multiple days for even a cashiers check to clear, and there are plenty of scams involving cashiers checks (just place an ad on Craigslist and wait for the scam attempts to begin). I would think a dealer would want some assurance in the name of risk mitigation above and beyond your word, and credit worthiness is often used to determine this. I think it would be reasonable though to work with the dealer to postpone physical delivery of the vehicle until all funds have fully cleared as a means to bypass this.

I would hope that dealership management would do a better job of relating their risks, concerns, and processes to help explain the requests/requirements, but as an Auxiliary Police Officer I can attest that not everyone in a service based role has the personality and communication skills to be successful at their job. At the end of the day if you are unhappy with the treatment you have received I would highly consider going to another dealership or escalating your concerns to higher management/owner of the dealer you are currently working with.

Thanks Tsax. I understand the dealership has to protect their business from real frauds out there. But you are absolutely right that the SM had a million better ways to approach and communicate this as a customer service ambassador. I will not step into that dealership again in my life, not if they offer a free car (and knowing how money craving they are, that won't happen in a million years anyway). Will try to get in touch with corporate and also a few other channels.

 

[snowang]

Would bringing my own credit report with scores from two bureaus and full history (from creditkarma) ease dealer concern and avoid a pull?

 

[tsax6010]

I will not step into that dealership again in my life

I have always felt that when buying a car, the majority of people already have a good idea of what they want and what they are willing to spend for it. With this logic I think that when most people step foot on a dealer's lot they are less shopping for a car and more shopping for a dealer/salesperson that they are comfortable handing their hard earned money over to.

Dealers are a dime a dozen - all selling the same basic wares and services - making customer service a significant value added proposition to differentiate themselves.

There is an industry term for dealership sales and management that cling to old school perceptions and techniques that gave the industry as a whole a bad reputation - "car pigs". Don't give your hard earned money to a car pig.