I Found Out My Car Dealership Lied About Me on My Loan Application
If your car dealership lied on your loan application, this could leave you in a precarious position with a new car that you cannot afford. Many car dealerships will falsify information on a loan application because they will earn a commission from bringing business to a financial institution they cooperate with. Unfortunately, these financial institutions may not be aware of the dealer’s fraudulent activities which will negatively impact you. If you or a family member was a victim of fraud by a car dealership, you should consult with an experienced Baltimore car dealership fraud lawyer. At Whitney, LLP, our devoted lawyers are prepared to help you pursue compensation against a fraudulent car dealership. Whitney, LLP is here to explain what to do if your car dealership lies about you on a loan application.
Methods Car Dealerships Use to Commit Loan Fraud
If you want to purchase a new vehicle and you plan to seek financing, you should perform your due diligence when securing funding. There are two options consumers have when financing a car: seeking funding from a financial institution or applying for financing through a dealership. Car dealerships use their connections with financial institutions to help a car buyer find a loan with desirable terms. Unfortunately, some car dealerships will use this opportunity to take advantage of the consumer.
The following is a list of methods that car dealerships use to commit loan fraud.
Falsifying Your Income
When filing a loan application, a financial institution must be assured that you have the means to pay for the vehicle you want. If a bank believes that your income is not enough to afford the vehicle that you want to purchase, they will more than likely deny your application. This is why that car dealerships that are desperate to sell vehicles will deceptively increase your income on a credit application. For example, if you tell your dealer that you pay $800 in rent every month, they may decrease that amount to $500 when they file your application.
If the loan application is approved, this can leave you locked in with repayment terms that you cannot afford. This will lead to severe consequences on your credit report and possibly the repossession of your vehicle. It is important to carefully inspect your loan application before it is sent to the financing company. If your dealer is rushing you through the loan application process or does not want to provide you with a copy of the application, you should avoid doing business with this dealership.
Power booking is when a dealer lies to a financial institution about the worth of the car. For example, the dealership may state the car has several additional features included like a rear-view camera or remote start. Including these fictional features will lead the bank to believe that the vehicle is worth more than it truly is. This will then increase the amount of the loan that the consumer must pay.
Spot delivery scams, also known as yo-yo financing, is an intricate scheme to commit consumer fraud. Once you complete your loan application and believe it has been approved and you drive off in your new car, the car dealership may call you and state the loan was denied. The dealer will then request that you return and agree to a new contract usually with a higher interest rate. If you resist this scheme, the dealer may decide to accuse you of stealing the vehicle or threaten to repossess it.
These are just a few of the schemes that dishonest car dealerships may use to get you to purchase a new car. Auto finance schemes are becoming more prevalent in Maryland and across the United States. Some car dealerships will use these schemes to earn a few thousand dollars while leaving you with multiple problems that could affect your credit for years. That is why it is important to look for financing before you turn to dealership financing. If a dealership is offering you financing that seems unbelievable in comparison to the research you performed, the offer is likely too good to be true.
Our Maryland Consumer Protection Attorneys Can Help You File a Lawsuit
If your car dealership filed a fraudulent loan application without your knowledge, you should contact an experienced Maryland consumer protection attorney. The consumer fraud attorneys at Whitney, LLP have decades of experience representing clients in various types of fraud claims, and we are ready to represent you. You should not have to suffer the consequences a falsified loan application can have on your credit due to a deceptive car dealership. To schedule a free legal consultation to discuss your claim, call Whitney, LLP at (410) 583-8000.