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May 25, 2012 1:03 AM by Jacqui Heinrich

Judge says auto dealers must give credit notice

WASHINGTON (AP) - A federal judge says auto dealers who use consumers' bad credit histories to charge them more interest on car loans must tell buyers they have negative information on their credit report, even if the loan is farmed out to a bank or finance company.

That ruling came Thursday from U.S. District Judge Ellen Huvelle in a battle between the National Automobile Dealers Association and the Federal Trade Commission. The law says auto dealers who agree to extend financing have to tell buyers that their bad credit history is being used to charge them more interest.

The FTC said the dealers were still responsible for the notice. Huvelle agreed and dismissed the association's complaint.

The NADA, which represents nearly 16,000 new-car and -truck dealerships, says it will appeal the decision.

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