Credit Application Forgery Scam. How to Avoid It?

Credit Application Forgery Scam. How to Avoid It?

The credit application forgery scam is a comparatively new type of dealer fraud. We have touched upon the problem of car financing and credit score scams in our previous articles  but this is quite a new thing you, as car buyers should know and try to avoid.

The whole thing is in the act of the dealer of literally forcing the vehicle buyers into a deal. People do not even suspect they have a car that must be paid for.

The credit application forgery scam takes two forms. Let’s review both of them. In the first scam scenario a person who wants to purchase a car enters the dealership. He is shown all the cars present in the showroom. Logically, the person asks to test drive a car. Here is where everything starts. The fraudulent dealer requires not only the person’s driver license, but also a credit application for the vehicle.

Do not be surprised. Quite many people fall for this scam. They complete a credit application as required from the dealer and then test drive the car. After one has completed a credit application, he must pay for the car monthly as this means he has bought the car.

So, even if the person has not liked the car or decided not to buy it yet, he will have to face the bill, as he has already signed the most important documents, the financing documents.

To avoid this, you just need to know that no person test driving a car can be required to complete a credit application.

The second form of the credit application forgery scam is forcing the cash buyer into car financing. For example, if you have the money in cash and you want to pay for the car immediately, the dealer may urge you to fill in a credit application to get those extra interest rates and fees for himself.

However horrible these scams may sound, they can be avoided if you are aware about them beforehand. So, be careful when entering any dealership.