An Illinois Kia dealership is being sued by a consumer after the retailer allegedly failed to provide adverse action notices required by federal law after the customer was denied credit last year.
Jamal May's U.S. District Court lawsuit filed May 12 alleges World Kia Joliet violated the federal Fair Credit Reporting Act and Equal Credit Opportunity Act, and the Illinois Consumer Fraud and Deceptive Business Practices Act. He seeks class-action status for the case.
The federal acts require consumers to receive similar but distinct disclosures if they are denied credit. The documents, known as "adverse action notices," offer additional details on why credit was denied and contact information for either the lender or credit bureau. The ECOA requires notice in 30 days; the FCRA says only that notification must be executed in a reasonable time. Both notifications can be lumped into a single document to simplify compliance.
"Without adverse action notice — Defendant's customers have no reasonable basis for knowing who denied their application, the reasons for denial, and notice of possible error," May's lawsuit states.
May also accused the dealership of running a hard credit check he didn't realize it would perform. The lawsuit quotes two Yelp reviewers who also allege the dealership performed unwanted credit checks.
His lawsuit alleges this credit check, the lack of adverse action notices and other behavior violated the Illinois consumer law, which prohibits any "deception," "misrepresentation," or material fact omission by a business.
"That's probably a far easier case to make than the federal law," Terry O'Loughlin, director of compliance for Reynolds & Reynolds, said of the state count.
World Kia Joliet has not responded to a request for comment. Court records do not yet identify an attorney for the dealership.