Risk-Based Pricing

Help Your Customers Understand Their Credit

Risk-Based Pricing can help you improve your compliance efforts and help your customers.

In an effort to better educate consumers on why they receive certain credit scores, and subsequently lending rates, the Federal Trade Commission has created a rule requiring risk-based pricing notices (RBPN). This rule requires dealers, and other creditors who use credit reports, to deliver an RBPN to consumers when credit is extended to them. This will enable consumers to check for accuracy, and if warranted, correct the scores they receive.

The rule is meant to complement the Fair Credit Reporting Act’s (FCRA) adverse action notice. These notices are required to be sent by a creditor to a consumer when a consumer’s credit application is denied based on information in a credit report.

What you need to know about RBPN


Why do I have to do this?

The risk-based pricing notice rule imposes a new requirement. It implements section 311 of the FACT Act of 2003, which significantly amends the Fair Credit Reporting Act. It is the latest (and the last major) duty mandated by the FACT Act.

But dealers aren't lenders, right?

Does every customer need a notice?