How do CC companies know I'm not lying when I state my income?

nzseries1

Hello all,

After having a Barclaycard Initial Visa to start me off when I moved to this country (APR 27.9%) I finally applied for a "proper" credit card and was shocked when I found that the limit on my new card was sooo much higher than on my Barclaycard.

I earn average money, but I was thinking to myself, I filled in my income on the application form... how do they know if I lied? If I stated that my income was £200,000 per year (it's merely a fraction of that, but this is just for an example), would they question it then?

I'm wondering what happens if people artifically inflate their incomes on CC application forms. Does anyone know?

Regards,
Matthew

smithja

Hi nzseries

That is why they tell you they give information to fraud prevention agencies.

Information such as your income given when you apply for credit is compared against previous applications and if there is too much of an anomly they will investigate it. If it turns out you were half asleep when you applied and you hit the zero key one time too many and did not realise then it would not be a problem but if you do it repeatedly they will put a fraud marker on your file. They will get in contact with you the first time to check it was a genuine mistake as people make them far more often with on-line applications than was ever the case with paper ones (if you put £200,000 on a paper app they will beleive you are attempting to defraud).

This will mean that when someone else comes along and searches your file they will see the fraud marker and call the other financial instituation to see exactly what the fraud involved. If you do this to many times they will then report it to the police, as technically it has to be reportable before a fraud marker can be placed on your file.

Also, they will have diverts in place to look at things such as very high incomes to ensure it is correct. They will call you at work to confirm you are there, they often dont even need to talk to you. HSBC once called my work and my colleague picked up the phone they did not want to talk to me it was just to confirm I was there. It actually made me rather concerned at the time when they did not wish to speak to me.

So they have their ways and I would not even think about if you want any kind of credit in the future.

Hope this helps.

James

nzseries1

That's real interesting to know, I certainly had no plans to do this, I already got a much higher limit than I was expecting and was just wondering really as they never asked me for any proof of anything, it was just really simple!

After getting turned down by Vanquis and Capital One when I first moved here, then turned down more recently by Post Office, MBNA, Lloyds, and another one I can't remember, it's nice to finally feel accepted - by Halifax!

skipsmum

lol! I did this the other day applying for a credit card. They phoned to ask if I really eaned £240000! I wish - I must have hit an extra 0!

NickX

If the Credit Card company suspect that you have lied about your salary (for example if it appears to have increased by a large amount) then they may well contact your employer for confirmation.

If they then find that you have lied on the application, this could be deemed as fraud and could potentially lead to a criminal prosecution.

YorkshireBoy

I'd be very surprised if any employer would release salary information Nick. I know mine won't...at least not without a signature (ie as part of a mortgage application) or other permission (ie memo, e-mail, or some other internal document).

Prosecution would be unlikely, IMHO, for a credit card/loan application. More likely the outcome would be an "application fraud: material falsehood: facility denied" CIFAS marker placed on your credit file.

NickX

YorkshireBoy wrote: »

Prosecution would be unlikely, IMHO, for a credit card/loan application. More likely the outcome would be an "application fraud: material falsehood" CIFAS marker placed on your credit file.

I agree that prosecution would be unlikely, but I know of a case where it has occured although the "inaccuracy" in salary information was added to various other offences as part of a wider fraud case.

NickX

YorkshireBoy wrote: »

I'd be very surprised if any employer would release salary information Nick. I know mine won't...at least not without a signature (ie as part of a mortgage application) or other permission (ie memo, e-mail, or some other internal document).

I guess this depends on the policy of the specific employer and perhaps even their relationship with the individual concerned.

I recall my first mortgage, when they did contact my employer at the time, the boss did come and ask if it was ok to release my salary information.

Now I work for myself, so if they did make contact it would be me who would have to confirm my own salary so that could be interesting.

James1715

I've been interested with this subject too. I always thought they looked at repayment patterns, credit limits and what products you hold with other organisations.

Most of my income comes from sources other than my employer. Most credit applications Ive filled in ask for total income with which ive been truthful, but Ive always wondered if they contact payroll depts.

I can imagine having awkward conversations with the boss. If he doesnt get the wrong end and think you are lying to people about how much he pays you, he will certainly know your financial details afterwards.

I suppose if you are able to prove your annual income from other sources via bank statements, investments or property etc lenders will be obliged to revoke any accusations of fraud. But it is a lot of hassle and worry I guess.

smithja

It has been a while since I read the Data Protection statement in detail on an application form but they used to state "we may carry out any inquiries as we think fit" (or words to such effect) and you were agreeing to this by signing the form.

If this is still the case and it is legally valid I can see no reason why under the DPA 1998 which is not there to protect fraudsters quite the opposite that any company's HR Dept. (or the payroll officer or your boss in a smaller company) should not give out the information after checking it was really their employee who signed the form (even if this involves not asking the employee but matching the signature and details, because the employee is hardly going to say yes when they realise they have been rumbled). In fact I am pretty sure they do do it at present.

benf90

If a credit card company wanted to check that the salary somebody entered is correct then they will ask for the last 3 original bank statements and/or pay slips to confirm the amounts.

This happens quite regularly and it may not even be the case that they suspect anything, sometimes it will just be a random choice.

Although I've not had it happen to myself I know people who it has happened to, and I've also read plenty of threads on here with people asking why a credit card company has asked to see their bank statements.

Sometimes if they want to check salary details then while they're at it they'll also check the identity and address aswell, asking for a copy of the passport/driving license and utility bill in their name etc.

I've never known a credit card company contact an employer to check salary details, I presume they couldn't even do this because of data protection laws, unless there's a specific signed document.

They will phone a place of employment to check that somebody genuinely works there, but that's just usually a quick phone call where they ask to speak to that person (as happened with smithja).