What is an Approved Credit Statement (WAC)?

An approved credit statement, or WAC statement for short, is a qualifier used in advertisements. It is intended to clarify that the offer being promoted is conditional on the buyer having a credit rating.

WAC statements are generally included in connection with financing offers, such as to rent conditions provided in an advertisement for a new car.

Understanding WAC Statements

WAC statements are one of the many types of qualifying statements commonly used in advertisements. These statements, commonly referred to as the ad’s “fine print” due to the small font in which they are typically written, are intended to protect the advertiser from claims of false or misleading advertising.

To this end, qualifying statements typically provide additional details about the terms associated with the particular offer being promoted in the advertisement. In the case of WAC statements, the offer is usually about the financial capacity of the product, for example when a car or other big price item can be purchased using credit provided by the seller or an affiliate lender. These advertisements often include incentives, such as interest-free periods or minimal down payments.

The inclusion of a WAC instruction is an import risk minimization strategy for the advertiser. Without this disclaimer, the advertiser could be accused of using bait and switch practices. This practice involves offering a product or service to a group of customers, where some or all of those customers will not in fact be able to purchase that product or service at the advertised price or terms. Bait and switch tactics are considered fraudulent and are a violation of consumer protection laws. Therefore, companies are careful to avoid this liability by disclosing the terms of their offers through WAC statements and other disclaimers.

The WAC statements themselves typically state that in order to qualify for the advertised terms, the client will need to qualify for credit approval based on considerations such as their credit rating, current and historical income level, and financial status. employment. However, consumer protection legislation, such as the Equal Credit Opportunity Act (ECOA), prevents companies from taking into account personal identity factors, such as ethnicity, gender, age, religion or sexual orientation of the customer.

Real example of WAC declaration

Laura is in the market to buy a new car. One day, she comes across a TV commercial for a new car that seems to meet the specs she’s looking for. Although the car is generally more expensive than it can afford, the advertisement indicates that the manufacturer is currently offering an attractive financing package with a minimal and very low down payment. interest rate during the first 12 months.

Upon closer inspection, however, Laura realizes that she could not participate in this offer. Written in fine print at the bottom of the ad, the company’s WAC statement clarifies that these attractive financing terms are only available subject to a credit approval process in which credit rating, current income and the guarantee of the applicant will be taken into consideration. Because Laura currently has a bad credit score and collateral, she anticipates that her application will not be approved.