Lying about income on credit card application = imprisonment.
You’re committing fraud if you knowingly lying about income on a credit card application. You may have been berated, as a child, with the famous words “Liar, liar, fire pants! “when you said (allegedly) a little lie. As adults, people who shout rhyming phrases at us certainly won’t call us out for fibbing. Lying as an adult, however, may have drastic consequences, such as prison time and seven-figure fines. Here’s what happens to when you choose to go for a path which is, lying about income on a credit card application.
Why people opt lying about income on a credit card application?
Many credit applications ask you for things such as your annual salary, mortgage, work status and load of debt. You could be accepted for further credit if you falsely inflate your wages, decrease your rent/mortgage payment, claim to be working when you are not or fail to disclose your entire debt load.
This may sound appealing, especially if you’re in financial difficulty, but it’s illegal. For a reason, lenders grant you credit limits; objectively, this is the amount on which you can fairly make payments in a timely manner. If you feel the need for lying about income on a credit card application request, it’s possibly because your budget doesn’t suit the loan.
The repercussions of lying about income on credit card application
You’re committing fraud if you knowingly are lying about income on a credit card application. Credit fraud will cost fines of up to $1 million and/or imprisonment for 30 years. This little white lie had just become a whale. This isn’t worth it. You can be prosecuted for lying on credit card application.
Does your lender really verify income and debt information?
Usually, lenders only find significant differences in recorded results. For instance, you have a greater chance of being caught if you claim $10,000 of income on your tax return and $90,000 of income on your credit application than if you claim $10,000 and $12,000, respectively.
Sound far-trapped? It’s not. In 2006, David Gaylord registered revenue to the IRS of $12,488 and revenue on multiple credit applications of $90,000-$122,000. Not surprisingly, he was charged with bank loan request fraud. He was not fined $1 million or sentenced to 30 years in prison, however. He had to pay a nearly $50,000 fine and was sentenced upon release to time served and probation. That is how big your punishment can be if you are lying about income on credit card application.
The future of credit application verification
How do credit card companies verify income? Mimi Chong, a Ph.D. student at Western University in London, has set about catching liars on credit applications in response to credit fraud. Her paper Catching Liars: Big Data and Credit Card Fraud suggests a way to prevent little white lies from costing big cash to banks.
Chong believes banks need to upgrade their existing systems that only detect huge lies and fibs that are not small, but also potentially damaging. Banks may do this by employing outside auditors and also educating their personnel to investigate the various variables of the application.
It can be a costly error to lie on a credit application. Correctly report your wages, mortgage, job status and cost of housing. Chances are, your lender will not be testing these items. But it has every right to, and you could end up paying a lot of dollars and/or spending time in a concrete cell if it does.