Quicken Settles Charges it Failed to Provide Adverse Action Notices

The federal regulator said Quicken failed to provide “adverse action” notices, which notifies consumers when their credit report is wholly or partly the reason for denial of credit.

“Consumers who are denied credit or other benefits based on their credit report have a right to know, and lenders have a legal responsibility to tell them,” said J. Howard Beales, III, director of the FTC’s Bureau of Consumer Protection. “An adverse action notice is the key to maintaining the accuracy of sensitive personal information and the signal to check your credit report for accuracy.”

Quicken, one of the growing number of online lenders, told its customers who didn’t preapprove for an online loan that they had “unique borrowing needs.” Quicken then instructed them to click through to provide contact information that would allow a Quicken loan consultant to contact them about other options.

Consumers who received the “unique borrowing needs” advisory but did not submit the contact information online received no further contact from the Lavonia, Mich.-based company, the FTC said.

The FCRA requires lenders that deny credit to consumers to give consumers the name, address, and telephone number of the reporting agency where their credit reports were obtained. It also requires lenders to notify consumers of their right to receive a free copy of the credit report, and their right to dispute the accuracy or completeness of the report, the FTC said.

The FTC said Quicken was in violation of the FCRA in this manner for about one year. Under the terms of the proposed agreement, Quicken must begin providing notices that comply with the FCRA.

A Quicken representative was not readily available for comment.