By Matthew M. Young, Attorney
While forging paystubs to obtain credit is not a new concept, I have a number of credit unions that have advised me of an alarming increase in the use of these phony documents to support employment and corresponding income. Historically, forged paystubs were more common for indirect automobile loans obtained via dealerships and assigned to the credit union. More recently, I am hearing more about forged paystubs being used to obtain credit card and unsecured loans as well.
The best way to avoid falling victim to these scams is being aware that the use of these forged documents is commonplace as part of the loan application process. Being mindful of this type of fraud during the underwriting process will help you spot a fake paystub. Do all of the digits and decimal points line up? If not, you’re probably looking at a forged document. Programs like QuickBooks and Excel typically align in neat columns. Also, take a minute to do the math. If the numbers don’t add up, it is most certainly a fake.
In cases where you suspect a forgery, of course, be certain to verify employment by calling the employer. Better yet, in cases where you are reviewing an applicant’s paystub, adopt a policy to do an employment verification across the board. Do not rely on the phone number provided on the paystub; attempt to get the business’ phone number from a third party source.
By being mindful that this fraud is prevalent and taking basic steps to avoid it, your credit union can avoid falling victim to this increasing scam.