Answer:
If the call is legitimate and your customer has actually applied for financing with the dealership, you can disclose the payoff balance under __.14 of the privacy rule, since the information sharing would be necessary to effect a transaction initiated by the customer. Be mindful of the fact, however, that the request may not be legitimate. It could be an over-eager salesman trying to "size up" a potential customer. Keep your ears open for any tales of abuse of that sort involving the particular dealership. Use a call-back procedure or caller ID to confirm the call is coming from who they say it's coming from. If all else fails, and you don't feel comfortable with the request, tell them to have the customer contact you directly and, after following your customer verification procedures, release the information to the customer directly.
First published on BankersOnline.com 4/01/02
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