But F&I managers shouldn't give in to the temptation because it's still illegal no matter what the intent is.
Van Over is president of gvo3 & Associates in Crown Point, Ind. He spoke by phone with Automotive News Special Correspondent Jim Henry.
You've said that one remedy for forgery is double-checking credit applications. Is forgery really that common?
A lot of people do check whether the signature appears to be the customer's signature. But when I talk about comparing different versions of the same credit app, it's to confirm that no bank fraud is taking place. For instance, bank fraud could be falsifying information on the credit app -- falsifying the value of options, falsifying who the actual driver is if it's not the person making the payment.
What's the distinction?
Forgery can be bank fraud, but not every bank fraud is forgery.
Are there any common misconceptions or bad practices you run into?
Forgery can exist on any document. There are people who think forging a contract is the only forbidden act. Any other document, that's "kind of OK" in a lot of people's opinion. But it can be forgery on any document. It can be the spouse signing the other spouse's name, if the F&I manager knowingly lets it take place. It could be using "signature on file" or "per phone" on documents instead of a signature. That's OK on some credit card agreements, but not in F&I. Or it could just be someone in sales or in F&I signing.
Is this done on purpose?
Here's an anecdotal story. One of our clients has a clear policy and procedure for sales and F&I. They have what they call nonnegotiables -- eight or nine "thou shalt nots or thou shalt be terminated." One is: "We will not sign the customer's name or allow anybody else except the customer to sign the customer's name."
So what happened?
They bring a new finance manager on board, and like all new employees they spend a lot of time with her on the nonnegotiables. About 30 days later they get a call from a lender: "Check the signature on this deal. It's obviously not the customer's signature." She admits to doing it. They say, "We went through all this, why did you think it was OK?"
The answer was: "One, it was just on a service contract where I overlooked a signature. The customer signed something else agreeing to buy that product. And two, the last dealership where I worked it wasn't exactly allowed, but if you got backed up you did whatever it takes to get it done."
Isn't the temptation to do this tied to commissions -- how much people earn?
They rationalize their felonies. There are two basic reasons, I guess. There could be a financial incentive. More commonly, I think, it could just be laziness. "I forgot to get the signature. I don't want to call the customer back in. I'll just do it myself." I don't think a lot of forging gets done to improve the financial picture.