Car dealer's 'pre-approval' isn't based on a credit check

Dollars & Sense

February 09, 2003|By Liz Pulliam Weston | Liz Pulliam Weston,SPECIAL TO THE SUN

I received a notice from a local car dealership that I had been "pre-approved" for an auto loan up to $24,632. The letter said the offer was based on "certain credit-qualifying information received from a credit-reporting agency." Apparently, these folks ran a credit check on me. Can they do that? We've already signed up for the "opt-out" service offered by the credit bureaus. Can we require credit agencies to have our permission before releasing our credit data?

The car dealership didn't run a true credit check on you. What it did was buy from a credit bureau a list of consumers who met some minimum-credit standard the dealership had set.

This is what credit card companies do before sending out fleets of "pre-approved" credit card offers.

Other than using the opt-out service - which reduces but doesn't eliminate such credit solicitations - there's not much you can do. (For people not familiar with the service, it's run by the major credit bureaus and can be reached at (888) 5-OPT-OUT.)

If you had applied for the loan, the dealership would have pulled your full credit report to determine if you were creditworthy. Despite the wording of the notice, you wouldn't be guaranteed the loan.

You've advocated letting the IRS deposit a refund directly into your checking account. You should revise your thinking. To have the refund electronically deposited is to give the government access to your bank account. This allows them to review your bank records and make withdrawals without your knowledge. Anyone authorized to make electronic deposits can also make unauthorized withdrawals.

That's a lot of misinformation for one paragraph.

It's true that the IRS, your employer or the Social Security Administration has a limited ability to take money out of your account - essentially, they can take back a payment they deposited to your account if the deposit was made in error. Otherwise, they can't use the direct deposit system to touch your funds. The IRS has other ways to get at your money if it wants to, of course.

What direct deposit does is speed your refund, paycheck or Social Security payment safely to your bank account. The IRS says 40 million people used direct deposit last year.

As a retired supervisor with the Social Security Administration, I found the inquiry about the person who hasn't paid taxes since 1972 so typical of those people who don't want to give the government a dime but expect services and benefits and are outraged when they don't get them. Many times, I spoke to individuals who filed self-employment tax returns and couldn't understand why their Social Security benefit was so low. They might have made $100,000 a year, but they skewed their figures to pay the least amount of taxes. Don't you think the person who didn't pay taxes is just another freeloader who deserves nothing but a possible jail term?

As you note, many would-be freeloaders wind up hurting themselves. In this case, the man stopped paying taxes to protest the Vietnam War. Over the years, he worked low-paying jobs. His employers most likely were withholding taxes from his paychecks - taxes that largely could have been refunded to him had he filed his returns. Now it's too late to claim those refunds for all but the last few years.

His behavior, though regrettable, doesn't rise to the level of fraud usually required to earn a jail term.

Liz Pulliam Weston is a contributor to the Los Angeles Times, a Tribune Publishing newspaper.

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