Quicken Loans Settles with FTC
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Online mortgage lender Quicken Loans has settled government charges it violated the Fair Credit Reporting Act (FCRA) by failing to provide "adverse action" notices when pre-approvals are denied because of bad credit reports.
The Federal Trade Commission (FTC) announced the settlement Tuesday that mandates Quicken Loans to provide "a clear and conspicuous disclosure in close proximity to the pre-approval offer that pre-approval may be granted online or offline."
If the Web-based lender determines it cannot grant pre-approval online because it needs additional information, the settlement calls for Quicken Loans to notify the consumer that the request for pre-approval has not been denied, but that it needs additional information from the consumer. Also, if the consumer submits the additional information, Quicken Loans will decide whether to grant the request and inform the consumer of its decision, according to the settlement.
There were no fines or penalties involved with the settlement.
"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 FTC director J. Howard Beadles. "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."
The FTC's complained that for a period of about one year, Quicken Loans offered approximately 35 different mortgage loan products on its Web site but violated the FCRA in many of its dealings with consumers. Quicken Loans has discontinued the practice.
The company offers mortgage loans in all 50 states and allows consumers to use the Internet to compare various home loan options as well as receive pre-approval for and track the status of their online loan applications.