Don't Get Fooled by Fake Pay Stubs!
All dealers know that before they can approve financing for a customer they must verify his or her income and employment status. However, an increasing number of dealers have reached out to TIADA via our Compliance Consultation Service to report customers trying to use fraudulent pay stubs and employment information.Many of these would be con artists easily obtained these fake documents from websites online. They then tried to pass them off as genuine in order to misrepresent their actual income or employment status.
We reached out to a few experts in the finance industry to see what steps dealers could take to avoid falling victim to these scams. Below are some of their simple suggestions.
- Avoid accepting copies of pay stubs, ask customer to bring original and copies can be made at the dealership.
- Utilize tools such as Google, Google Maps and Yellow Pages to Verify the employer is an actual business.
- Look up the company address on the pay stub to verify it is a business and not an apartment complex.
- Call the employer to verify the hire date and match the year to date- Do NOT verify with managers. Go straight to HR or Payroll unless it is a family owned business.
- Calculate the taxes on the pay stub.
- Examine multiple checks to ensure the year-to-date totals add up and are accurate.
- Look out for repeated pay stub formats- the same formats are often circulated.
- Request bank statements if pay stubs indicate direct deposit.
These suggestions could help a dealer spot a fake but are not guaranteed to work every time. As always, TIADA encourages dealers to consult with their own legal counsel when setting their own internal policies.
If you have your own compliance questions, please submit them through our online Compliance Consultation Service, the fastest way to get answers to your questions.
Contirbuters to this post include:
David Lobel of Lobel Financial. He can be reached at DLobel@LobelFinancial.com
Somir Paul of Woodlands Financial. He can be reached at SPaul@woodfininc.com
Greg Reine and Jenissa Rice of Auto Liquidators.