Falsifying Credit Information is a Crime

We often see clients come in who we wonder how they qualified for the loan to buy the car. We have learned that it is because the dealer finance personnel provide false data to the finance company.

Dealer Falsified Auto Loan Application

I had a retired truck driver come in last month. His income consisted of about $1500 per month including a VA benefit. He had been sold a $35,000 car. We called the finance company and learned that his application had been falsified and they said he made over $35,000 per year. We told the finance company that he only made $1500 per month and showed them. WE took back the car and the finance company let him out of the deal.

Car Dealers Indicted for Loan Fraud

This article talks about this criminal activity.

Employees of the Serra dealership in Birmingham were federally indicted for this crime.

“As managers and salesmen in a car dealership, these defendants falsified customer information used to make loans, defrauding the banks who trusted the dealership to present truthful information during the vehicle financing process, and harming customers by fraudulently inflating the value of the vehicles they purchased,” she said. “This type of fraud is the auto-industry equivalent of the mortgage fraud that contributed to the financial meltdown, and could threaten the security of our financial markets,” Vance said.

“Today’s arrest clearly illustrates that individuals who engage in these types of illegal activities will be held accountable for their actions,” Hyman-Pillot said. “These defendants clearly took advantage of the people in their community, as well as financial institutions. They manipulated the system and falsified documents with the intention of increasing profits at the expense of others.”

“This case is significant to the FBI not merely because of the loss amounts, but also because of the many victims left in the wake of this scheme who had trusted the defendants with handling their vehicle financing,” Schwein said

The 11-count indictment charges the defendants with conspiring with others at the dealership, between August 2010 and October 2013, to defraud financial institutions, Nissan North America and Serra Nissan customers by fraudulently increasing vehicle sales in order to boost personal profits.

The indictment also charges Wilkinson, Burton, Perry and Riley with bank fraud for fraudulent loan information submitted to financial institutions in October 2012. Defendants Wilkinson, Perry and Henderson also are charged with wire fraud for fraudulent information submitted to automotive financing companies such as Nissan Motor Acceptance Corporation and Santander Consumer USA.

How to Avoid Auto Loan Application Fraud

How do you avoid this? Make sure you give accurate information to the dealer. Ask to see the credit application filled out before you sign it. Don’t let there be blanks for your income. Do not agree to providing false income information. That is a crime. Contact the finance company once approved to verify the information.  Be suspicious if you are being sold more car than you thought you could afford.