Dealer lawyer Michael Charapp, co-author of the book Auto Dealer Law,says dealerships should adopt a clear, written policy on accepting telephone credit applications. His book offers 10 tips on handling credit over the phone:
1. Check with the credit reporting agencies to make sure they allow phone-in credit applications. Some don't. Some also require dealership personnel to physically inspect customer identification before running a credit report.
2. Get customers to fax you a signed copy of a credit application as well as a copy of an acceptable ID.
3. If the customer doesn't have access to a fax machine, clearly ask the customer if the dealership can obtain a credit report. Then write on the application that authorization was given over the phone, noting the date and time.
4. Do not use speakerphones while collecting customer information. The information must be protected.
6. Don't share any credit report information with customers until they arrive at the dealership and present acceptable identification.
7. Mail customers a credit score disclosure within two days after pulling the credit report to comply with the federal Risk-Based Pricing Rule. Be sure to mail the disclosure to the current address shown on the credit report rather than the unverified address on the credit application.
9. Don't mail the credit score disclosure if customers clearly withdraw their credit application.
10. Mail an adverse action notice if the dealership cannot obtain financing for the customer.