Is this against the law?

Factual Questions
1

Is it against the law to give false information on a credit card application and if so, what is the penalty?

I was just wondering because a friend of mine gets these ‘you are preapproved to be approved to apply to be approved to sign up for our credit card’ applications’ in the mail all of the time. By the ton, actually, which causes him great amusement because he’s on disability and is paying off the mass of bills he got trying to survive while getting approved.

Anyhow, he filled out the forms for a couple, put himself down as self employed and listed his income as a couple of thousand over the minimum and shipped them out.

Is that against the law? I thought I read somewhere that it was but it doesn’t say anything about it in any of the applications I’ve read. I get those things by the ton also and drop them in the trash and none have ever said anything about giving false information.

I never knew you could be pre-approved to be approved to sign up for a credit card.

2

don’t know about the legality, will let some one else ask you which state you’re in first.

But. Just 'cause they send you a ‘pre-approved’ credit app won’t mean that they will actually give you a card.

3

First, let me qualify myself. I work for the only remaining credit bureau that creates pre-approved credit lists and sells them to the major credit card lenders and just about anyone esle sending you a pre-approved offer for something. If you got a pre-approved offer, it came from our database, which we scanned as per the customers’ instructions, looking for certain criteria, and we create a mailing list for them.

When you are “pre-approved”, you meet a certain criteria than a particular lender has asked us to scan our database for. IT DOES NOT MEAN YOU HAVE “GOOD” CREDIT. Some companies look for folks with marginal credit, knowing they are more likely to swap lenders, or take a higher interest rate card (like targetting dumb people, and making a dumb offer that they will accept).

If you credit changes from the time the d-base scan runs, or if the other info (like income and address info) isn’t to the lender’s liking, you can still be declined.

AND, to answer the main question, it is NOT illegal to lie on a credit application. The burden is on the lender to find out if the information is accurate.

This holds true for basic loans, but the area gets foggy when you are talking about mortgages. If you come up with an elaborate way to trick someone who is investigating your job and your finances, then it’s a federal crime. Some mortgage salesman help people falsify their docs to secure a mortgage and they are in federal trouble. It’ll get you a year and a day in federal prison.

If you’d like to “opt out” of pre-approved offers and many other offers you get in the mail, call 800-546-4781. This will get you off pre-approved lists generated by Trans Union, Equifax and Experian. The 800 number is one-stop- shopping and will reduce the number of offers you get in the mail.

Other companies you do business with will continue to sell your name and you will get some, but not as many, offers in the mail.

BTW… I lie on credit applications all the time. THEY DON"T CHECK income. Not even car dealers, if your credit score looks good.

4

Thanks, Philster. I took your excellent advice, which I know must be true, because you posted it so confidently in the General Questions forum of a website devoted to fighting ignorance.

Unfortunately, it seems you were wrong, as I’ve now been indicted by a federal grand jury for violation of 18 U.S.C. § 1014, which prohibits “any false statement” to a bank or credit union “for the purpose of influencing in any way the action” that bank or credit union might take. Not to worry, though - I can only get 30 years in the federal pen, and I’ll probably be in minimum security.

Frankly, I’m more worried about the other false application I filed on your excellent advice. That one’s being prosecuted by authorities here in Virginia, which provides in Va. Code § 18.2-186 that any person who “makes, causes to be made or conspires to make directly, indirectly or through an agency, any materially false statement in writing, knowing it to be false and intending that it be relied upon, concerning the financial condition or means or ability to pay…” and gains credit over $200 as a result, is guilty of grand larceny. This is punishable in Virginia by imprisonment in a state correctional facility for not less than one nor more than twenty years. And it won’t necessarily be in minimum security; Virginia’s funny that way.

In sum, of course, I was just kidding about being indicted. But I am serious that (a) readers considering this course of action need to be aware that lying on credit applications is prohibited by both federal and some states’ laws, and (b) if you don’t know the answer, don’t post it your guess as a fact in General Questions.

  • Rick
5

We’ve seen our customers (banks) lose many a battle with folks who falsified applications because the banks have made it a practice to not investigate the applications, and the process (or lack there-of) is a legal joke (Mr. Bank, you’ve made a joke of the practice, so expect consumers to lie). Merely scribbling down an inflated income is about illegal as having dirty thoughts. I believe the insurance industry has also learned that if they make investigating claims a joke practice, they are liable for being the sucker, more-so than the liar consumer is responsible.

Technically, your are correct, and I should not have made such sweeping statements.

When mortgages and such are invloved, the issue gets a lot clearer because the lender does research the application. Screw around with the application and you could get a year and a day.

I appreciate your feedback, Rick, but I guess I was operating in the world the way it IS, not the way it’s SUPPOSED to be.

Again, your a correct, and it would be safer not to make such a claim.

6

Philster, I called that number you gave and it tries to connect to a modem. What gives?

7

Opt out by dialing 888-567-8688!

Gets you off many pre-approved mailing lists!

8

Phil,

I don’t doubt that these sorts of things are rarely prosecuted - after all, with the vast majority of credit offers being under $5,000, it would cost the banks at least that much to investigate the case and build enough evidence for a district or U.S. attorney to pursue it; it’s easier for them to extend the credit and hope everything works out.

If you had said it was technically illegal, but almost never prosecuted, you’d have heard not one peep from me. But I did have a strong reaction to your saying that it was legal – in capital letters, no less – when it isn’t.

All is good now. :slight_smile:

  • Rick
9

Just thought I’d post this, quoting directly from one of our (the bank I work for) credit applications:

I’d also like to point out that if we find out about a fraudulent application, where credit was granted and the loan defaults (so we suffered a loss because of it), we will notify the authorites to attempt to prosecute. It doesn’t cost us much to do so as it’s a criminal statute, so we’re not paying for the lawyers, etc. And the evidence we need to supply has usually already turned up during collection efforts.

Every month, I get a stack of checks from the Wisconsin Department of Corrections Victims Fund to apply towards losses we incurred due to fraud. These funds come from wages earned, while incarcerated or on probation, by the perpetrator.

In short, don’t do it.

10

That’s interesting. I recall a boss of mine, in the past, who agreed to inflate the salaries of a couple of employees applying for credit, if the bank called to verify their employment and pay range.

I reject the credit card mass mailings because of the interesting little thing they toss in at the end about APR and interest, how it’s actually for a higher grade of card and if the applicant doesn’t qualify for that card, a lower grade, lower limit one will be selected with higher percentage rates.

One even, in small print, said that after 6 months of low interest, that the rate would go up based on the daily rate of the Fed as published in the Wall Street Journal plus 20% and be charged accordingly. That sounded like there would be no set rate of interest, but a variable, daily rate based on the amount of any unpaid balance not cleared within the normal billing period, which could be real high.

Not to mention confusing.

11

Lying on a credit card application is fraud. It is a false pretence due induse another to get a result. It is quite clearly and definitely illegal.

Trust me - I’m a lawyer.

12

How does a lawyer say “f*** you?”

Sorry, couldn’t resist.