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Scam Alert: Don't Fall for the Patriot Act Credit Check Scam

» Posted October 27, 2017Resources | Share This Post

Many different problems can arise during the car buying process and after you bring your vehicle home. If you have issues with a car that you have purchased, the California Lemon Law can sometimes protect you.

In many cases, however, you want to be proactive in trying to avoid problems, even before you head to the dealer. This means learning about car dealer scams to avoid and being smart about the kinds of information that you offer  to dealers if you're shopping for a car. One key scam that you will want to avoid is called the Patriot Act credit check scam.  Bankrate reported on this scam and explained how it happens and why dealers do it.

Understanding the Patriot Act Credit Check Scam

If you are buying a vehicle and you plan to pay cash for it or you have secured financing yourself from a bank, credit union or other outside source, you should not have to get your credit checked by a car dealer. Sometimes, however, unscrupulous dealers try to trick you into letting them pull your credit. They do this by saying that the Patriot Act requires a credit check.

Bankrate explains that the oft-repeated claim that a credit check is mandated by the Patriot Act is not true, and that dealers simply use this an excuse to get you to give them your info and to give them your OK to run your credit. Dealers may want to run your credit to find out more about your financial situation, or to try to convince you that you should finance with them, even if you have secured your own funding source.

The U.S. Patriot Act, which was passed to fight terrorism in 2001, does not mandate that car dealers run a credit check and does not require you to allow a credit check to occur.  Car dealers are allowed to pull your credit only if you consent, according to the Fair Credit Reporting Act.

You usually consent when you sign a loan application with the dealer, but no such application needs to be signed if you're paying cash or have arranged your own financing. Dealers, however, could try to get you to consent by claiming the Patriot Act mandates a credit check, and this trick often works because most people don't know exactly what the Patriot Act does require.  When it does work, your credit score could go down because of the inquiry and you could also end up with the dealer changing the way in which a deal is structured because of information revealed in the credit check.

If a dealer tries to run a credit check under the Patriot Act, this could be a major red flag that the dealer is not to be trusted.  Unfortunately, there are tons of untrustworthy dealers out there, some of whom scam buyers and cause financial loss. If you are concerned about falling victim to a scam, find out how consumer protection laws like the California Lemon Law can help to protect your interests.


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