[ksks]

I've been a lurking on these forums for a while -- I have learned a lot from your collective experiences. I had a very weird experience when I went to collect my red Ascent at a Seattle-area dealership today. It had been paid for. I could use some advice on what to do next.

Here is my story. About a month back, I negotiated a deal over the phone with a saleswoman at the local dealership. I went to meet her, signed the order form, and put down a $500 deposit. I was very clear with the saleswoman that I would not be financing the car. I was told "no problem" and that a credit check wouldn't be required if I wired the remaining funds before collecting the car. Personal or cashiers checks were not an option.

A few days back, the saleswoman provided me the dealership's bank account number and I sent over the funds. This was to be our family's first Subaru and we were all very excited.

After hearing today that my car had arrived and everything was in order, I went to collect it. I inspected the vehicle with the saleswoman and then went inside to do the paperwork.

I provided my drivers license and insurance information. The dealership then wanted me to sign a "Consumer Credit Application" and the accompanying FCRA permission form to run my credit report. I reminded my saleswoman that I don't need financing and hence won't be signing these forms. The atmosphere started getting tense when I stood my ground. The Sales Manager walked in and I was told that these forms are not for a credit check but for an "OFAC compliance check". I pointed out that the forms were clearly asking for permission to run a credit check and said nothing about OFAC. The Executive Manager was consulted on the phone and apparently she too said that there would be no way out of this.

This is what I have learned about OFAC compliance -- it is the U.S. Government's effort to clamp down business with banned individuals. The US Department of the Treasury maintains a public Specially Designated Nationals (SDN) list. Any dealership (or actually any one of us) can search a name against this public database at the US Treasury website. See link

Just to be clear, I am not on the list. Since the wait was getting unbearably long, I showed the saleswoman the above self-service website. She searched my name and confirmed that there was no "hit".

Now, I am wise enough to know that dealerships don't like it when you pay cash because it robs them of additional profit. However, how can you corner me into signing a credit application when the first result on Google for "car dealership credit report scam" implicates a Subaru dealer! See the link for yourself. Scams like this show up all over the web. Unscrupulous Subaru dealer names come up a lot! Therefore, I was proceeding cautiously.

I want to point out that I was happy to sign any specific "OFAC form". I just won't pretend that a "Consumer Credit Application" is that. But the dealership had no such OFAC forms on hand.

I sympathize with my poor saleswoman. She was trying her best to navigate the situation with her bosses. Together with her, I even created a customized form that just had my name and required identifying information that said "For OFAC Check Purposes Only". However, the Sales Manager would have none of it -- he wanted a signed credit application period. He was extremely rude and asked me to rescind the deal and take my money back if I was unwilling. However, very conveniently "finance department people" had all gone and "I wouldn't get my funds today".

It came down to either I sign the credit application or leave the car. I walked out of the dealership in disgust! As I type this, the dealership rests happy with both the car and money.

What should I do? What does Subaru get out of torturing customers who simply want to protect their credit information and want a straightforward, all-cash transaction? I do plan to email SOA and post their response here.

Do I have any other recourse? Does a dealer in the State of Washington (or elsewhere) have the right to coerce someone to agree to a credit check by falsely invoking federal anti-terrorism and trade sanction laws? Does the FTC or FCRA address such issues?

 

[Subiesailor]

Contact Subaru. But you need to know dealers are not Subaru they are 3rd party companies. Every State especially west coast states have consumer protections. A dealer cannot take your money and withold the purchased vehicle over a unnecessary credit check.

At this point the dealer is in deep chit regarding consumer protections and personal finance regulations around requiring a credit check when its your credit not his.

 

[ksks]

Thanks Subiesailor! I have contacted Subaru and will look into consumer protection laws too. I am still hoping we still get the car -- we have been waiting so long for it.

 

[Radaghaast]

You could always freeze your credit and authorize their credit pull (they wont get anything from it). There's fees involved but everyone should probably have their credit frozen after the equifax leak anyway. Might be the fastest way to get your vehicle.

 

[NHAscent]

My Ascent was a cash purchase and I paid by personal check at the time I took delivery. No hassles and no requests to fill out any unusual forms.

 

[jacket4256]

I really have very little input just want to follow along and see how this ends up, sorry for the crappy treatment I feel bad for ya pal.




Also call SOA they are very pleasant to talk with and in my experiences always very helpful or can point you in the right direction. Like Subiesailor said there should be laws to protect you from this.

 

[bluesube]

Seeing as you are in Seattle, you have a ton of dealers to choose from in the area and some must have good reputations. Should not be hard to find one by word of mouth. I would not deal further with these guys. Do you think they will be easier to deal with when you go for warranty or service work, after this introduction to their business?



FWIW I found this list https://content.subarunet.com/snet/_content/_attachment/stellar_retailers_2017.pdf

 

[Subiesailor]

My Ascent was a cash purchase and I paid by personal check at the time I took delivery. No hassles and no requests to fill out any unusual forms.

We have paid cash for several new vehicles not once have we had to fill out forms beyond the sales agreement.

This Finance person needs to go back to washing cars in the back lot.

 

[Jason]

Every dealership is different. My dealership requires a SSN or equivalent for every purchase whether it be cash, finance, wired, etc. We do our very best to protect your personal information. Chances are this dealership is the same.

Easiest way around this is to just give it to them and drive your car away. If you are super worried, freeze your credit, unlock it for 30 minutes while they pull it, then freeze it again. No need to cause a big storm about it. Its the dealership protecting themselves. No offense to nice people, but the con-artists are the nicest and most normal looking people out there. I've met more than a few

If its too big of a mountain for you to climb, ask for your money back and go somewhere else.

 

[jmbgold]

My Ascent was a cash purchase and I paid by personal check at the time I took delivery. No hassles and no requests to fill out any unusual forms.

New Hampshire dealers tend to be a tad easier and less complicated to deal with-I drove from Martha's Vineyard to Tilton N.H to buy my Ascent.

 

[ksks]

We have paid cash for several new vehicles not once have we had to fill out forms beyond the sales agreement.

This Finance person needs to go back to washing cars in the back lot.

My Ascent was a cash purchase and I paid by personal check at the time I took delivery. No hassles and no requests to fill out any unusual forms.

That has been my experience too when buying other cars in the past. It was an extremely unpleasant experience. I have yet to hear back from the dealership or SOA. They continue to sit tight with both my car and money.

 

[srikanth777]

Every dealership is different. My dealership requires a SSN or equivalent for every purchase whether it be cash, finance, wired, etc. We do our very best to protect your personal information. Chances are this dealership is the same.

Easiest way around this is to just give it to them and drive your car away. If you are super worried, freeze your credit, unlock it for 30 minutes while they pull it, then freeze it again. No need to cause a big storm about it. Its the dealership protecting themselves. No offense to nice people, but the con-artists are the nicest and most normal looking people out there. I've met more than a few /forum/images/smilies/smile.gif

If its too big of a mountain for you to climb, ask for your money back and go somewhere else.

Jason, I've gone through this experience too. The OFAC check and personal check verification is good and I fully support it from an ethical and risk perspective, But why should the dealership, any dealership run credit for a cash transaction ? I don't quite follow that part. Also, is that a soft pull or hard pull ?

 

[ksks]

Thank you Jason of Mark Miller Subaru. You have perfectly captured the attitude of my own dealer. I was worried that this conversation was getting too one-sided.

I can think of no legitimate reason for a dealer to ask for a SSN or a credit application for an all-cash transaction. My dealer has had all my money safely sitting in their bank account. It was sent as an ACH transfer from my local bank account and is fully traceable / auditable. All relevant identifying information is right there on my state-issued enhanced drivers license and my insurance card. I am taking title in my own name. Do you want me to fill out any IRS disclosures -- I'd be happy to do that.

So why are you asking me for my SSN or my credit application? Even the SDN list of banned individuals under the Patriot Act just contains names (no SSN, address or DOB). It is publicly searchable with just a name (see link in my original post). Unlike a credit report, no permissions are required to search for bad guys in the database (hence there are no formal forms for it anywhere). So the claim that you need all this information for a "compliance check" is simply bogus. Don't just take my word for it -- hear it from experts at Edmunds, or here, or here.

No offense to nice dealers too but check out these articles about rotten Subaru dealers that have scammed unwitting buyers on the pretext of getting information for the Patriot Act.

1. Subaru of Maryland. Click link
2. Subaru of Portland. Click link

Am I really making a mountain for nothing? Shouldn't I be cautious?

Jason - are you upfront with your all-cash buyers that their credit will be checked and that a SSN is a prerequisite for all transactions? From the outset, my dealer was very explicit that the way to go around a credit pull was to deposit all the money in their bank account before I took possession of the car. I did as told. But they want to bait and switch.

I thought Subaru attracted more discerning customers. I had heard that Subaru cares about pets, the environment, veterans, social impact. But I'm not seeing much "love" for people who care about their financial information or question why they need to fill out a credit application when it is not needed. I guess Subaru just wants people who throw around their SSNs all over and those who have been sleeping through all the data breaches over the past year -- is Equifax breach old news already?

I'm yet to hear back from SOA. But I have two simple suggestions:

1. Make it very clear in all your advertising that sharing SSN and personal financial information is a precondition for purchasing any of your cars.

2. If that is too onerous, prohibit your dealers from engaging in this practice for cash buyers.

I'm sure Subaru makes fantastic cars but please please don't ignore the buying experience.

Every dealership is different. My dealership requires a SSN or equivalent for every purchase whether it be cash, finance, wired, etc. We do our very best to protect your personal information. Chances are this dealership is the same.

Easiest way around this is to just give it to them and drive your car away. If you are super worried, freeze your credit, unlock it for 30 minutes while they pull it, then freeze it again. No need to cause a big storm about it. Its the dealership protecting themselves. No offense to nice people, but the con-artists are the nicest and most normal looking people out there. I've met more than a few

If its too big of a mountain for you to climb, ask for your money back and go somewhere else.

 

[Denversubie11]

I completely understand your frustration, doesnt make sense for them to pull your credit. But...Is it really that big of a deal? Yes, your credit is dinged but not much. For a hard pull you might see 5 points. You have the cash to pay for a brand new $30k plus vehicle so you obviously have good credit and you are smart with your money...You will get those points back within a month or 2, no biggie. If I were you I would just sign it and make sure they know how stupid their policy is hahaha!

 

[Holly Tedesco]

Sign the paper, get the car and be done with it.

 

[Jason]

Jason, I've gone through this experience too. The OFAC check and personal check verification is good and I fully support it from an ethical and risk perspective, But why should the dealership, any dealership run credit for a cash transaction ? I don't quite follow that part. Also, is that a soft pull or hard pull ?

It is simply to protect the dealership. We are huge targets for all types of fraud. 99.99% of the buyers are just fine and won't cause problems. But that very slim percentage can be the difference between staying in business or getting shut down.

Thank you Jason of Mark Miller Subaru. You have perfectly captured the attitude of my own dealer. I was worried that this conversation was getting too one-sided.

I can think of no legitimate reason for a dealer to ask for a SSN or a credit application for an all-cash transaction. My dealer has had all my money safely sitting in their bank account. It was sent as an ACH transfer from my local bank account and is fully traceable / auditable. All relevant identifying information is right there on my state-issued enhanced drivers license and my insurance card. I am taking title in my own name. Do you want me to fill out any IRS disclosures -- I'd be happy to do that.

So why are you asking me for my SSN or my credit application? Even the SDN list of banned individuals under the Patriot Act just contains names (no SSN, address or DOB). It is publicly searchable with just a name (see link in my original post). Unlike a credit report, no permissions are required to search for bad guys in the database (hence there are no formal forms for it anywhere). So the claim that you need all this information for a "compliance check" is simply bogus. Don't just take my word for it -- hear it from experts at Edmunds, or here, or here.

No offense to nice dealers too but check out these articles about rotten Subaru dealers that have scammed unwitting buyers on the pretext of getting information for the Patriot Act.

1. Subaru of Maryland. Click link
2. Subaru of Portland. Click link

Am I really making a mountain for nothing? Shouldn't I be cautious?

Jason - are you upfront with your all-cash buyers that their credit will be checked and that a SSN is a prerequisite for all transactions? From the outset, my dealer was very explicit that the way to go around a credit pull was to deposit all the money in their bank account before I took possession of the car. I did as told. But they want to bait and switch.

I thought Subaru attracted more discerning customers. I had heard that Subaru cares about pets, the environment, veterans, social impact. But I'm not seeing much "love" for people who care about their financial information or question why they need to fill out a credit application when it is not needed. I guess Subaru just wants people who throw around their SSNs all over and those who have been sleeping through all the data breaches over the past year -- is Equifax breach old news already?

I'm yet to hear back from SOA. But I have two simple suggestions:

1. Make it very clear in all your advertising that sharing SSN and personal financial information is a precondition for purchasing any of your cars.

2. If that is too onerous, prohibit your dealers from engaging in this practice for cash buyers.

I'm sure Subaru makes fantastic cars but please please don't ignore the buying experience.

You are welcome ksks

I'm not trying to be a jerk. Just stating my opinion 100% of the time my customers sign a credit form that clearly states we are running credit. We don't submit it over to any lender, we just need to see their bureau to make sure there is nothing funny on there. If we were ever audited we need to be able to show we did everything possible to verify where that money is coming from.

The simplest example is the loads of trouble a dealership gets in if they sell a car to a drug dealer. Average Joe drug dealer won't show up on the OFAC list, but he'll have loads of cash to spend on a car.

Sure there are risks for you as the buyer. There are bad dealerships out there, but the odds are heavily in your favor that you'll be just fine. There are risks with everything you do.

Its unfortunate that the dealership misrepresented their policy to you. Perhaps it was an honest mistake, you are dealing with humans after all, perhaps they outright lied to you. Either way it is what it is.

Like I said before, every dealership is different, I'm sure you can find one that doesn't protect itself as well. You are welcome to buy a car from them.

 

[ksks]

Seeing as you are in Seattle, you have a ton of dealers to choose from in the area and some must have good reputations. Should not be hard to find one by word of mouth. I would not deal further with these guys. Do you think they will be easier to deal with when you go for warranty or service work, after this introduction to their business?


FWIW I found this list https://content.subarunet.com/snet/_content/_attachment/stellar_retailers_2017.pdf

I do appreciate your suggestion. I don't know about where you live but it appears that many of the smaller Subaru dealers have consolidated in the Seattle area. Both Subaru dealerships in the city of Seattle are under one management (Carter Subaru).

When you have a busy household with demanding jobs and very young kids, you sometimes get lazy in your due diligence. I took the easy way out by going to the most convenient dealer. I am learning from my mistake.

 

[ksks]

For everyone who is asking me to just sign the form and be done with it. Yes, I am thinking about it. We like the Ascent and don't want to get back in the queue and wait again for months. I just don't like being cornered and pressured like this. I'm waiting to hear back from SOA.

To show you how ridiculous this ask is, see the picture of the application the dealership handed to me. Reading the fine print it says I'm getting into a contractual relationship and authorizing "VW Credit, Inc., Audi Financial Services, Ducati Financial Services, VW Credit Leasing, Ltd. and any of their respective parents, subsidiaries, affiliates, agents, and independent contractors."

No mention of my dealer's name or Subaru! Is this because of incompetence or by design? I'm asking sincerely, do you feel comfortable signing this document and moving on?

 

[Gregor]

It's shady as sh!t! It may be their normal practice because they wanted to try to finance you and make more money off the loan. Now they have dug their heels in and refuse to break that practice.
There is no legal reason to need your SSN unless your name pinged on the OFAC list and they are trying to confirm you are who you say you are. I don't know if they would tell you this or not???
But you're stuck with two options.
1. Give in, take the hit on your credit score and take your car home.
2. Stand your ground, get your money back and start over.

If you go option 2, perhaps you'll have to start any price negotiations by speaking to the finance manager first to confirm their practice of checking SSN and credit check before you even bother talking price.

And if I recall correctly, this goes beyond just a Subaru thing. I was with my mother when she was buying her Toyota cash and they still ran her credit... and even though she was paying cash, they tried to get her to finance the car.
They are trying to make more money off of you... your credit score pings back high, they of course try to get you to finance some of the cost because you look like a safe loan to give out.
I nearly fell out of the chair when they wanted to run my credit when I bought my Outback. My credit SUCKS! I couldn't finance a new set of tires! But since I was paying cash, I just smirked and let them do it. Gee, they didn't offer me any loans. LOL

 

[Jason]

This isn't a Subaru matter. If they reply it will be something along the lines of "We encourage every dealer to treat our customers with the utmost respect. However, each dealership is free to set their own practices, etc..." They may send a box of cookies though