{"id":2469,"date":"2017-03-13T09:00:43","date_gmt":"2017-03-13T13:00:43","guid":{"rendered":"https:\/\/www.autoraptor.com\/?p=2469"},"modified":"2017-03-13T09:00:43","modified_gmt":"2017-03-13T13:00:43","slug":"adverse-action-notice-compliance-customers-get-denied","status":"publish","type":"post","link":"https:\/\/www.autoraptor.com\/blog\/adverse-action-notice-compliance-customers-get-denied\/","title":{"rendered":"Adverse Action Notice Compliance: Why Customers Get Denied"},"content":{"rendered":"

\"Adverse<\/h2>\n

There are three primary scenarios in which you should always send an adverse action notice<\/h2>\n

Use the term \u201cadverse action notice\u201d around a new salesperson at your dealership, and watch their eyes widen and eyebrows raise. For auto industry newbies, the term just sounds negative\u2014regardless of the fact that they have no clue what it all means. Even for more seasoned employees, the laws surrounding adverse action notices can be slightly confusing.<\/p>\n

Don\u2019t let these notices throw you off your game. Once you understand what they are, why they\u2019re necessary, and what your obligations are, you\u2019ll feel much more confident during your next customer interaction.<\/p>\n

\"WhatWhat is an adverse action notice?<\/h3>\n

If you\u2019re helping a customer secure credit to purchase a vehicle, an adverse action notice is a letter you must give them if any terms change in a way that is unfavorable to them<\/a>. The entire purpose of this notice is to protect the consumer, so if anything in a credit decision isn\u2019t working out in their favor, it likely requires the issuance of a letter.<\/p>\n

Not sure whether you\u2019re involved enough in financing to have to send an adverse action notice? If your dealership plays any role in credit decisions\u2014setting the interest rate, determining the term length, or any other term of credit\u2014then you\u2019re considered a creditor under the Equal Credit Opportunity Act (ECOA). If you don\u2019t participate in credit decisions at all and only refer applicants to creditors, you may be exempt.<\/p>\n

\"WhyWhy financing falls through (and what your obligations are)<\/h3>\n

When you receive a credit application from a potential buyer, you\u2019re probably going to run it right away to get the deal moving. However, you do have 30 days from receipt of an application to decide what the outcome will be. After that, you\u2019d send an adverse action notice.<\/p>\n

Why would a customer be denied or have financing fall through? These are the three top reasons you\u2019d have to send an adverse action notice:<\/p>\n