Hands Down Fraud
By Jon Coss, Vice President, Risk, Fraud, and ComplianceApril 9, 2020
Here’s a recent case of potential fraud that should surprise, well, no one. A California used car dealer has been accused by the State Attorney General of preying on vulnerable customers with deceptive advertising, misleading and expensive service contracts, and even falsifying customer incomes to get them loans for cars that they couldn’t afford.
This type of fraud follows the pattern of fraud that we commonly fight at Pondera: people taking advantage of vulnerable populations. In this case, these populations included the elderly (who “benefited” from fabricated “Senior Gold Programs”) and recent immigrants who unwittingly paid for expensive service contracts that salespeople literally covered with their hands while reviewing the purchase contracts with the buyer.
And to make things worse, although this is also a common tactic, the dealership tried to deceive the public by touting itself as a pillar of the community and protector of lower-income residents. All the while, the dealership’s employees were using a special nomenclature to describe their tactics including “packing income” and “hands down closes” when they covered expenses with their hands. Disgusting.
The only real variation on the theme from our typically encountered fraud schemes was that, in this case, the dealership artificially inflated incomes to allow consumers to buy vehicles. In many government program fraud schemes including tax and benefit programs, people artificially deflate incomes in order to qualify for benefits. The motive, of course, is the same: fraud. Here’s hoping that the government cracks down hard on the alleged fraudsters.