U.S. District Judge Ellen Huvelle ruled that auto dealers are obliged to notice consumers who have lower credit scores why they have to pay higher interest rates.
The judge upheld a Federal Trade Commission decision according to which dealers have to follow a provision in the Fair Credit Reporting Act that requires auto dealers to inform consumers on how they can obtain a copy of their credit history report and correct any incomplete or false data. This information could help consumers avoid identity theft.
The National Automobile Dealers Association said that auto dealers shouldn’t be obliged to do this, but the FTC concluded that use the credit report even if it is not obtained by them, and so they must offer notice to consumers. NADA sued the FTC concerning this issue but the court agreed with the FTC.
“This ruling will make it easier for consumers to learn about unfavorable information in their credit reports,” said Stuart Delery, acting assistant attorney general for the civil division. “The auto dealer is in the best position to provide this information because the dealer interacts directly with the consumer.”