Hi, Lou Ann,
I have a car question for you! :-)
We’re using a broker to find a car for our college daughter. She’s back home in Japan with us until next Wednesday, when she’ll go back to Los Angeles with daddy in tow to pick up the car.
The broker was recommended by a friend who works at a credit union. The guy buys cars for many of the credit union’s clients; he goes to look for cars and (supposedly) negotiates better prices than what we could find going directly to a dealer. Additionally, he will talk to the insurance company to get the paperwork ready.
At first, I was in contact with this guy, but I decided to pass the baton to Saaya so she could feel like she’s buying her own car. He asked “loan or full payment.” She said — full — do you take credit card (we can earn miles! lol), but he said “check.” (That made sense, after all, credit card companies do take a commission from the “seller.”)
But now he’s talking about signing papers for a loan? He wrote to Saaya asking her to send in a credit application (for the Patriot Act) in order to buy the car.
Have you heard of such a thing?
We’re not borrowing money to buy the car, and the broker was already informed of this.
When I called our bank in Tokyo to request a wire transfer to a bank in California where we have a checking account, all they asked us was “What is the money going to be used for?” (Yeah, right. I’m sure people who money-launder tell the truth??? lol)
I had thought buying a car would be a simple process of writing a check.
Have you heard of this Patriot Act “requirement”? This site was quite informative. Car buying scams that say, “Abuse of the Patriot Act? We are getting complaints from car buyers who have their own car financing from a credit union or an online lender, and the car dealer forces them to sign a credit application anyway, falsely claiming “it’s required by the Patriot Act”. There is no verse in the Patriot Act that I can find requiring you fill out a credit application, or allowing dealers to run credit checks on you when you bring your own car financing.
Their bogus claim sounds believable but armed with verbiage of the law, you can stop them. Ask the car dealer to tell you which exact section of the Patriot Act requires them to make you fill out a credit application when you have your own financing, and collect your Social Security number, and run your credit report. Since they claim it’s required, they should be able to show you the verbiage (HINT: They can’t).
The Patriot Act (H.R. 3162), Section 326 “Verification of identification” requires banks and financial institutions to verify your ID before you open an account. Since you are not opening an account with the dealer and they are not a bank, they don’t need you to fill out a credit application or a Patriot Act form. The Patriot Act form I filled out for my mortgage only asks for your loan number and driver’s license number, not your SS#, and it does not say “Credit Application” on it. The Patriot Act specifically calls out driver’s licenses or passports for ID verification. Nothing more. Dealers fool you into filling out the credit app, so they can run your credit through a half dozen local banks in an attempt to lead you into the dealer’s financing so they can get more commission. But why all the lies?” The Patriot Act (H.R. 3162), Section 326 “Verification of identification” requires banks and financial institutions to verify the ID of customers before one opens an account. We are not opening an account with the dealer nor is the dealer a bank. Did something change that the public is unaware of?
The name “Patriot” sure makes it sound like you’re unpatriotic or a traitor if you refuse to sign it. What a psychological misnomer.
Thanks for any advice you might have.
The only dealer I have gotten in touch with is Bruce Westrup, President, Reliable Buick, Cadillac, Pontiac, GMC in Roseville, CA. Westrup says they have folks fill out a five-line application because, “under the broad definitions a car dealership can be defined as a financial institution, so it doesn’t sound like the broker is trying to scam her.”
Let me know how this goes and if you find out anything else.
From Michael Mah, Larry Hopkins Honda
Federal law requires our Dealership (Businesses) to screen all customers against OFAC’s list of over 5,000 known drug traffickers, money launderers, and terrorists in every transaction. This requirement falls under the USA Patriot Act, the anti-terrorism legislation signed into law as a result of the events of September 11, 2001.
Penalties for noncompliance are severe. Criminal violations can result in:
Fines of $50,000 to $100,000 and/ or
Up to 30 years imprisonment
This OFAC report is built into most credit reporting applications (as an option) so when a credit report is run, it will also check the names against the OFAC list. But don’t let that confuse you, you are under no obligations to go along with a credit check only to have your name matched against such a list. An OFAC check can be performed separately without the credit check being run!!!!!
You might be curious as to what des “OFAC” stands for?
Office of Foreign Asset Control (United States Treasury Dept.)
See details below:
In response to an inquiry by Client (our Dealership) for the OFAC Screening Service, A Credit Service Provider/ Company will submit the inquiry to a company (“Watch Provider”) that matches consumer names to a file which is kept by the United States Treasury Department, Office of Foreign Asset Control (“OFAC”) of Specially Designated Nationals whose property is blocked, to assist the public in complying with the various sanctions programs administered by OFAC. Base upon the inquiry, the Match Provider will perform a match and the Credit Provider Company (Our Vendor) will transmit and return to Client (our Dealership) the match results provided by the Match provider. Our Vendor does NOT manage the matching algorithm of the Match provider for this service.
Michael C. Mah
Larry Hopkins Honda