$30,000 Car Dealership Credit Application Fraud Settlement

Whitney, LLP recovered a $30,000 settlement shortly after filing a lawsuit alleging fraud on a credit application against a new Toyota dealership in Maryland. In the lawsuit, the allegations stated that the car dealership increased and inflated our client’s annual income from $12,000 to $36,000 per year, and changed her job title from a “Stylist” to “Asst Manager” for the purpose of qualifying her for financing for a new 2020 Corolla that she otherwise could not afford.

Whitney, LLP’s attorneys help car buyers recover compensation and sue car dealerships in a variety of claims, including credit application fraud, running multiple credit checks without permission, and forgery and fraud in finance and lease contracts. Here are reviews from some of our past clients, and here are some of our past settlement results in claims and lawsuits against car dealerships. Our lawyers provide Legal Consultations to car buyers.

Our client initially went to the car dealership to have service performed on her car. After she was told that her brakes were unsafe, she was offered the possibility of purchasing a new car at the same payment she currently had.  Although she warned the salesman that she was unlikely to be able to afford a new car due to credit score and a low income, she was told that she was approved for financing.

She provided her actual income and employment status the her salesman, and signed the credit application. After several exhausting hours at the car dealership, she signed a large amount of paperwork using E-Signatures, traded in her current car, and took delivery of the new 2020 Corolla and went home. She was provided with all of her sales and financing documentation on a USB drive. Providing customer documentation on a USB drive is an increasingly common practice at car dealerships.

Different Incomes on Two Car Dealership Credit Applications

Upon arriving home, she reviewed the documents. To her surprise, she discovered that her new payment was almost $200 more than her current payment. Although she had signed a credit application stating her actual income and employment, she also discovered a second credit application that stated her income was $36,000 instead of $12,000, and that she was an Assistant Manager instead of a Stylist.

She immediately knew that she could not afford the new car, and knew that something had gone wrong after seeing her inflated income and promotion to manager. Our client then did a Google search for auto fraud and credit application lawyers, and found Whitney, LLP’s attorneys to help her.

Lawyer to Help with Car Dealership Credit Application Fraud

Whitney, LLP’s credit application fraud lawyers began to investigate the claim and review the sales and finance documents. After discovering the original credit application with the correct income, and the second credit application with the incorrect and inflated information, we filed a lawsuit alleging fraud, fraudulent concealment and violation of Maryland’s Consumer Protection Act.

The lawsuit also alleged violations of Maryland laws that prevent car dealerships and their employees from making material misrepresentations and committing fraud during the course of selling a car:

1. The Maryland Transportation Code Ann., § 15-312(b) titled “Prohibited Acts – – Vehicles Sales Transactions,” reads as follows: “Making material misrepresentations in obtaining vehicle sales contracts. – A dealer or an agent or employee of a dealer may not make any material misrepresentations in obtaining a vehicle sales contract.”
2. The Maryland Transportation Code Ann., § 15-312(c) titled “Prohibited Acts – – Vehicles Sales Transactions,” reads as follows: “Fraud – – A dealer or an agent or employee of a dealer may not commit any fraud in the execution of or any material alteration of a contract, power of attorney, or other document incident to a sales transaction.

Shortly after filing the lawsuit, the case settled for $30,000, including our client returning the new car she could not afford and getting her trade in back.

The Car Dealership Lied on My Credit Application

Generally speaking, credit application fraud occurs on a regular basis at almost all car dealerships. The purpose of credit application fraud is for the dealership to sell a car to a customer who cannot otherwise afford the payments. By raising a car buyer’s income to state they make more money per month, or annually,  than they really do, the finance company relies on the inflated income and allows the buyer to finance more car than they can afford. The dealership sells the car, the customer gets the car they want, and the finance company gets to make a loan. It seems like a win-win-win situation.

However, after a few months, the customer begins to have trouble making payments, is late, and their credit score goes down. In the worst cases, the car is repossessed, and the customer can only buy another car at a very high interest, or may be unable to buy another car.

Red flags for car dealership credit application fraud include:

• the payment is more than what was discussed;
• the payment is too high;
• incorrect and inflated income on the credit application;
• decreased rent or mortgage expenses on the credit application.
• The most dishonest dealerships will tell their customer that the bank will call them to verify their credit application information, and to just say yes to whatever information is on the credit application.

Attorney Near Me for Auto Credit Application Fraud

Whitney, LLP’s lawyers successfully represent car buyers in lawsuits against car dealerships across Maryland, including in Baltimore, Bel Air, Columbia, Germantown, Silver Spring, Waldorf, Frederick, Ellicott City, Glen Burnie, Gaithersburg, Rockville and Bethesda.

If you have a car payment you cannot afford, or discovered that your income or employment position was inflated on the credit application by the finance manager or dealership, we may be able to help.

For your Legal Consultation, call us at 410 583 8000, or use our Quick Contact Form.