Have you ever noticed that when you apply for a mortgage or auto loan, you suddenly get a thousand other offers?  Is AI taking over and somehow the amorphous cloud knows you are about to buy a home or car?  Not exactly.  More likely, the credit bureau that supplied your loan officer with a credit report to qualify you for the loan has shared your credit and contact information with other lenders.  This practice is both common and surprisingly lawful.

The Fair Credit Reporting Act (Act) is a consumer protection law that regulates credit reporting.  One would think the Act would shield consumers from being bombarded with unsolicited offers, but the Act specifically allows the sharing of a person’s credit report when the consumer is going to be provided with a prescreened offer (defined as “a firm offer of credit or insurance.”  15 U.S.C. § 1681b(c).  In other words, lenders can access your credit report information to see if you have applied for a mortgage, prescreen you for a loan, and contact you to offer their pre-approved mortgage.  The Act allows this to encourage competition and hopefully provide the consumer with multiple options so they can secure the best terms available in the market.

However, unsolicited offers can be a major nuisance.  For example, an employee of CBS news in Miami recently applied for a mortgage and was bombarded with dozens of phone calls just minutes later (see the full story by clicking here).  Fortunately, for consumers who prefer not to be contacted by unsolicited offers, the Act provides them an opportunity to “opt out.”  15 U.S.C. § 1681b(e).

The credit bureaus have created a single point of contact to opt out of these types of solicitations:

Call 1-888-567-8688 or visit www.optoutprescreen.com.  Please note the consumer will need to provide personal information including their name, address, social security number and date of birth.  Please also note it may take up to five (5) days to register the “opt out”, so potential home buyers may wish to “opt out” five (5) days before applying for a mortgage loan.  Consumers may also wish to register their phone number on the “Do Not Call List” at https://www.donotcall.gov/.

Aaron M. Green, Esq., a licensed Arizona attorney, is the General Counsel for the Arizona Association of REALTORS®.  This article is of a general nature and reflects only the opinion of the author at the time it was drafted.  It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.