Increasing Auto Loan Credit Application Fraud

Credit application fraud in car loans is alive and well in Maryland.  Approximately 1 of every 5 credit applications that Whitney, LLP reviews for our clients, or as part of our Free Car Contract Review Program, reveals credit application fraud and often forgeries as well. This is an increase from the approximately 1 of every 10 that we have seen in the past.  Consumers who purchase vehicles who have been deceived by new and used car sellers with credit application fraud have strong legal claims that the consumer fraud protection lawyers Whitney, LLP can recover compensation for.  

What Is Credit Application Fraud

Credit application fraud is when information on the credit application is misrepresented to a bank in order to receive approval for financing.  The types of credit application fraud that the consumer protection attorneys at Whitney, LLP have seen the most are (1) fake jobs (2) inflated salaries and (3) lowering or not reporting rent and mortgage payments.

Credit application fraud using a fake job happens when the car seller states on a customer’s credit application that the customer has a job that they actually do not have.  The reason for this is that a bank is much more likely to approve financing for a car buyer who has a job than for someone who does not have a regular source of income. Credit application also occurs when the car dealership submits a credit application that falsely states that a person has worked at a job longer than the time they actually have been there. The purpose for this is to create a false appearance of longer employment stability to present a false appearance to the bank that a person is a better applicant for credit than they really are.

Credit application fraud using an inflated salary occurs when the car seller submits a credit application that inflates a person’s income.  This happens very often based on the credit applications that Whitney, LLP reviews. It is not uncommon to see annual salaries inflated by $10,000 to $20,000 on a credit application.  The purpose of this type of fraud is to represent to the bank that the applicant for credit has a greater income than they really do to show that they are more likely to be able to make the monthly payments that they are applying for.

Falsely stating a consumer’s rent or mortgage payments is a form of credit application fraud.  The lower the monthly expenses that a consumer has, the more money they have available to make their car payments.  The consumer fraud car dealership attorneys have seen many instances where a person who pays rent every month had a credit application submitted that says they pay no rent or they “live with relatives.”  

Consequences of Car Dealership Credit Application Fraud

Submitting false information to a bank is both a state and federal crime.  However, many car dealerships and finance managers have gotten away with it for so long that submitting false information on a credit application is just another day on the job, and is not concerning to them at all.  The criminal acts of car dealerships and finance managers create the risk of facing jail time and fines, as well as losing their licenses to sell cars or being involved with selling cars in Maryland. It is important to state that while many dealerships and car salesman and saleswomen do not participate in this illegal and criminal behavior, there are still many that do, which reinforces the negative stereotype that the general public holds of car dealerships. 

The consequences to victims of credit application fraud are very serious.  Being approved by a bank for a car loan that you qualified for based on inflated salary or decreased rent creates the situation where you may be approved for a vehicle that you are not going to be able to make the payments for.  Whitney, LLP has cases where a customer is approved for an auto loan based on false information submitted in the credit application, and then is unable to make the payments because they do not actually have the money coming in every month that the car dealership told the bank was available.  Consumers then default on the loan, causing the car to be repossessed which then causes transportation problems including the inability to get to work, their credit score goes down, and in some cases it leads to declaring bankruptcy.

How do Car Sellers Commit Credit Application Fraud

There are two main ways that Whitney, LLP has seen credit application fraud committed.  The first is when the customer is asked to sign a blank credit application. The salesman or manager then fills in false information and submits it to the bank.  The way to guard against this is to never sign a bank credit application, and only sign it once the information has been added. The other way that dealerships submit false information to banks is by having customers use an E-Sign tool.  Customers are asked to sign their name electronically on a special pad, and a computer then places their signature on whatever document the employee operating the computer tells it to. In these cases, the customer did not necessarily agree to the paperwork that they “signed,” and often times does not know what they are actually agreeing to.  The way to avoid issues with E-Signing is to refuse to use it and insist on a paper copy.

Find A Lawyer for Auto Loan Credit Application Fraud

Whitney, LLP has represented many consumers who have been defrauded by car dealerships.  The cases we have represented consumers in range from credit application fraud, forged signatures, used vehicles being sold as new vehicle, salvaged titles not being disclosed, fraudulent dealer installed add-on charges, and many other situations.  Credit application fraud is just one area that our consumer attorneys help consumers with. There are no out of pocket costs for our clients, and all attorney’s fees are paid out of money recovered from the car dealership.

Free Car Contract Forgery and Fraud Review

Consumers who bought a new or used car should take advantage of Whitney, LLP’s Free Car Contract Review Service.  All that is needed is to contact us, and then send your original contract documents that you received when you bought the car, and then either you or our attorneys will contact the bank that holds the car loan and get a copy of those documents.  Whitney, LLP’s consumer protection attorneys then review the documents for all violations as part of our free review and consultation service, and discuss your potential causes of action with you when we have finished the review. There is no charge for this service, and there are no out of pocket costs for our clients, with all attorney’s fees are paid out of money recovered from the car dealership.

Contact Us Now with our Quick Contact form,  or call 410 583 8000, for Your Free Auto Fraud Consultation and Free Car Contract Forgery and Fraud Review.  


“When others did not want to take my case Whitney, LLP was willing. Dan was very very patient with me and his communication was always on point no matter how he reached out. He helped me and my family start our lives all over, I thank him so much.”

– Client

Read More Testimonials

“I would definitely recommend this firm. I contacted them just to get some insight and I was informed that I indeed had a case, and they won! Any questions or concerns I had were answered and explained clearly. They were very kind and informative throughout the whole process. I am very grateful that I stumbled across their page, it has changed my life. Thank you.”

– Client

Read More Testimonials


  • This field is for validation purposes and should be left unchanged.


409 Washington Ave,
Suite 750
Towson, MD 21204
P: (410) 583-8000
F: (800) 893-1239


An attorney-client relationship is created only once a representation agreement is signed. Prior results are not a guarantee of future results, and all cases are different. This website does not provide legal advice.


Whitney, LLP fights for the injured and deceived. We offer legal consultations.


© Whitney, LLP | Sitemap | Privacy Policy
  • This field is for validation purposes and should be left unchanged.
Call Now Button