Auto Loan Scandal

There is a lot of money with fraudulent loans for cars. Unless you get caught, that is. Then there are a lot of fines to be paid.

That’s what Charlotte Auto dealer Louis Harrelson has discovered. According to a story in the Charlotte Observer, Harrelson is now paying more than $ 1 million in fines and restitution for the role he would have paid a car loan fraud scam.

According to the Observer, sellers falsified loan papers for buyers, to ensure that the buyers can qualify for loans, even if they do not credit histories or income levels are vereiste. Harrelson car dealership employees were charged with making false employment records and tax documents. She allegedly also wrote fake deposit checks.

Harrelson has avoided prison, but he will be shooting a lot of money to pay for the part he played in the car loan scheme, said the Observer.

The bigger problem is that such arrangements are far from rare. U.S. District Judge Frank Whitney was quoted in the Observer story when he says he hopes the penalties assessed Harrelson give other dealers a break before trying similar scams.

“This is the time to send a message to those in the retail community to ensure that loan applications are correct,” Whitney is quoted in the story.

One of the problems with these scams – and there are many problems – is that they saddle consumers with car loans so that they could not afford. There is a reason why some consumers simply do not qualify for a car loan: They have no monthly income or credit history to justify taking on such a financial burden.

Nobody benefits when consumers default on their car loans. In a bit of good news, the latest statistics say that car loan default continued to fall. However, if a significant number of unqualified borrowers obtain car loans, this may change.

It’s good to see the government pursuing car loan scams. It will not be possible, of course, for them to stamp out all these arrangements, but put a dent in the scam at least a starting point.

Be careful, even if you buy a car and contact your dealer offers to tweak your loan application. If you can not afford your new car loan, you can only run into financial trouble in the coming months.