True Credit Data and The Firm Offer of Credit

First, what is considered true credit data, or a ‘credit bureau list’? True credit data offers end user mortgage marketers several immediate advantages such as exact information on a consumer in comparison to modeled data where criteria is often determined on zip code based ‘modeling’. Essentially, a mortgage company may receive data on a consumer including exact credit scores and revolving debt amounts on output of the file or list they receive.

Now, considering the mortgage broker or lender is receiving this exact information, they must make what is referred to as a ‘firm offer of credit’. Meaning, you may not solicit a consumer then reject them for your offer based on the information provided if the consumer still meets the terms of the offer at the time they are solicited. Any ‘firm offer of credit’ marketing mail piece must include a disclaimer similar to the example below.

*Note: This is only an example and may not be approved for all direct mail applications and does not constitute advice in any way.

This is referred to as the “long notice”. In addition, most direct mail pieces utilizing prescreened true credit data will require a “short notice”.

Different rules also apply when telemarketing to a list of prescreened consumers. Of course all federal and state Do Not Call rules are required in addition to the usage of specific verbage included in the telemarketing script.

Some of the requirements that must orally be relayed to the consumer are:

• the marketer must disclose the consumer is “pre-qualified”
• must disclose the terms of the firm offer of credit, such as a minimum loan amount and maximum interest rate
• disclosure of offer restrictions or other terms of eligibility
• must disclose the consumer of his or her right to opt out of further offers of credit, and provide them the information to do so, such as including contact information for each of the three major credit bureaus
• if a consumer requests to be taken off of a companies marketing list, you must do so within 30 days

True Credit Data and The Fair Credit Reporting Act

The FRCA, or Fair Credit Reporting Act, governs the terms of prescreened credit data and it’s usage is monitored by the Federal Trade Commission (FTC). Prescreened true credit data certainly requires a variety of additional terms in order to make use of the ‘firm offer of credit’, some terms of which are outlined below.

A Firm Offer of Credit Must Include:

• an indication that the consumer is pre-qualified, pre-approved, or pre-selected for an offer of credit
• a listing of the terms and conditions of the offer, including interest rate and length of repayment period
• the minimum dollar amount for which the consumer has been pre-qualified
• estimated payment amounts must be stated as “sample” or “example”
• a statement indicating that a consumer may not be extended the offer of credit if at the time the status of the consumers credit has changed in some way
• must include an opt out notice

A Firm Offer of Credit Cannot Include:

• false or misleading statements that merely invite a consumer to apply for credit
• only a phone number to call in order for the consumer to inquire about opt out notices
• a consumers social security or drivers license number
• a known outstanding balance or monthly payment amount based on the true credit information you have received in the marketing list
• a consumers credit score
• the current lender name of a consumers mortgage
• statements regarding a recent bankruptcy or credit inquiry

It is important to understand that marketers may have other disclosure requirements under additional local, state, and / or federal laws, rules, and regulations, such as the Truth In Lending Act, and the Equal Credit Opportunity Act.

Please note that there are a number of other local, state, and federal laws, rules, and regulations governing email marketing, inbound and outbound telemarketing, direct mail marketing and other forms of marketing with the usage of prescreened true credit data.