Chicago Kia Dealership Denies Credit Applications Without Proper Notice, Class Action Alleges

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action claims a Kia dealership in the Chicago area has unlawfully denied consumers’ credit applications without providing notice of its privacy policy, the applicants’ right to opt out of the policy and an explanation for why their application was denied.

Moreover, the 16-page suit out of Illinois alleges defendant World Automotive Joliet LLC deceptively represents that consumers can get pre-approved for a car loan without any negative effect on their credit while failing to disclose that the application process will, in fact, lower a consumer’s credit score.

“Defendant’s conduct conceals the negative effect that Defendant’s application process has on customer creditworthiness – including lower credit scores and credit reporting that remains visible to lenders, insurance brokers, and potential employers for years,” the complaint states.

The plaintiff in the case says he applied for a car loan through World Kia Joliet’s website on August 16, 2021 and was informed that he was pre-qualified for a loan. Per the suit, the plaintiff’s credit application was evaluated by third party iPreCheck, whose terms of use specify that the credit offer originates from the car dealer and its affiliates.

According to the case, the defendant’s finance application states that applicants must only submit the last four digits of their Social Security numbers and that the application process “Does NOT Affect Your Credit.” Moreover, iPreCheck’s terms of use note that the information provided to the company will only be shared with the data provider, TransUnion, and the dealer, the suit says.

The plaintiff says he was attempting to avoid any hard credit inquiries and thus relied on the representations that his personal information would remain private and the application would not affect his credit.

According to the suit, World Kia Joliet’s website does not state the dealer’s privacy policy regarding the information it receives from iPreCheck or notify consumers of their right to opt out of its privacy practices.

Following the plaintiff’s application for credit, he received a call “within minutes” from one of the defendant’s sales agents, who then completed a credit application for the plaintiff and informed him that his application was “good,” the case relays.

When the plaintiff ultimately visited the World Kia Joliet dealership, however, the defendant’s agents shared his information with lenders, who made hard inquiries into his credit report without the man’s consent, according to the case. The plaintiff says a World Kia Joliet employee then informed him that no sales agents were available and refused him service.

Per the case, the defendant’s failure to provide the plaintiff notice of the adverse action, i.e., its refusal to provide or arrange financing for him, is a violation of state and federal consumer credit laws. Moreover, the suit claims World Kia Joliet unlawfully failed to inform the plaintiff of its privacy policy and his right to opt out of having his private information shared with third parties.

According to the suit, the plaintiff’s experience at World Kia Joliet is “not unique,” as evidenced by complaints on social media, in public records and with industry associations.

The plaintiff looks to represent anyone who, during the applicable statute of limitations period, received pre-approval loan offers from the defendant but whose credit applications were declined by the dealer without notice of a privacy policy, their right to opt out, and an adverse action.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s newsletter here.