The Federal Trade Commission served up a forceful reminder last week that inflating a customer’s income on a credit application isn’t just a little white lie, even if it’s intended to “help” the customer.
Besides possibly saddling the customer with a loan he or she can’t afford, it’s potentially bank fraud, FTC officials said.
“This is felony fraud, and we are committed to prosecuting it to the full extent of the law,” said Joyce Vance, U.S. attorney for the Northern District of Alabama, during a conference call March 26.
F&I experts warn dealerships all the time about misrepresenting customer income on credit apps, yet it still happens. For example, at a conference a couple of years ago, F&I trainer Gil Van Over, president of gvo3 & Associates in Crown Point, Ind., cited an example of an F&I manager “promoting” a Walmart greeter to “customer relations manager” on a loan application.
Vance said she recommends that consumers should always double-check the information on their credit applications before the F&I manager sends them off to lenders.
“This is an area where consumers do not have to sit back and take it,” she said. What should consumers do if it looks like the dealership tampered with their credit application? “Call the FBI office in their area,” she said.