Credit application fraud is one of the top three risks dealers face today. - IMAGE: Pexels/John Guccione

Credit application fraud is one of the top three risks dealers face today.

IMAGE: Pexels/John Guccione

Stories about the wonders and potential pitfalls of artificial intelligence have dominated the news cycle lately. You can use AI to write a song, create a fake pay stub, and more.

Along with identity theft and deceptive-practices claims, credit application fraud remains one of the top three risks dealers face today. In the past, consumers and identity thieves could surf the internet and create fake pay stubs and other documents to support many stips from finance sources on a deal, or to support an identity theft, or both. Now they can use AI to create those fake pay stubs, and some of the old methods to vet the pay stub have been put to rest.

One line I use in many of my recap meetings or training sessions when discussing identity theft and red flags is, “The thieves are getting better. We need to ramp up our game.” AI is helping the thieves and lying consumers get better – we must counter.

The Federal Trade Commission shut down three websites in 2018 that were selling fake documents that could be used as stips on a deal or for identity theft. Even with this regulatory action, a recent internet search for “fake pay stubs” generated a list of 23 websites selling fake stubs, tax returns, bank statements and other supporting documents.

Unfortunately, the onus is on the dealership to vet the stips that are provided to support a transaction. The finance source expects you to review the pay stub for accuracy and legitimacy when it asks for proof of income on a deal.

Tips for Vetting Paystubs

So how do you vet a pay stub for legitimacy? While the following tips are not guaranteed to catch every fake, they can certainly catch some of the phonies. I have used these tips over the years to uncover fake pay stubs:

Logical Dates

Most employers have scheduled dates for payroll – weekly, every two weeks, or monthly. Obtain more than one pay stub, then check the pay dates to confirm the stubs fall within the logical dates.

Perfectly Rounded Numbers

Have you ever received a paycheck whose amount was $x,xxx.00? Not likely. Pay stubs with perfectly rounded off numbers in the deductions and final amount deserve further vetting.

Customer Demographics

Many pay stubs include the consumer’s demographic data, such as address and Social Security number. Check this data against the same information provided on the credit application or during the sales process. You should also pull the dictionary off the shelf and spell-check.

The Math

Review the math on the pay stub. Any columns or totals that do not add up correctly are red flags.

FICA Deductions

The FICA deductions are a fixed percentage of income. If your calculation generates a different result than reported on the pay stub, you may have a phony pay stub.

Missing Deductions

W-2 employee pay stubs include gross pay, withheld amounts, and net pay, both current and year-to-date. If those are missing, you may have a bogus pay stub.

Flowery Fonts and Cheap Paper

Legitimate pay stubs use cold, nondescriptive fonts and are printed on thicker paper. A pay stub using a flowery font or printed on low-grade, recycled paper may just be a fake.


Call the employer and ask for HR. Ask if the consumer works at the company. If HR won’t provide any information, hang up and call back. This time, ask for the consumer by name and see if the receptionist inadvertently confirms employment. Use the same drill for the previous employer. Finally, look up the phone number yourself; the number the consumer provides may go to a call center or to a friend.

Direct Deposits Information

Ask for a copy of the bank statement covering the date of the pay stub. Look for a deposit equaling the net pay, especially if the pay stub indicates “direct deposit.”

Copies of W-2s or Tax Returns

While it is possible to jick a W-2 or a tax return, it is a much harder process and may require the identity thief to go back to the fake-pay stub website. Compare the info on the pay stub to the tax return for consistency.

Your Finance Source

If you have any doubts regarding the legitimacy of a pay stub or any other stip, simply send it to the finance source for a review. Many of them have access to software to conduct the review. With a thumbs-up from the finance source, there should not be a future chargeback.

Trusting Your Gut

Call it intuition, call it ESP, call it trust your gut. It is that feeling that something might be awry. If your gut is telling you that “something ain’t right,” listen. Thoroughly vet the documents, and get your finance source involved. They want to make a deal as badly as you do but also want to manage the risk of default and identity theft.

Good luck, and good selling.


Gil Van Over is executive director of Automotive Compliance Education (ACE), founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.

Originally posted on F&I and Showroom

About the author
Gil Van Over

Gil Van Over


Gil Van Over is the executive director of Automotive Compliance Education (ACE), the founder and president of gvo3 & Associates, and author of “Automotive Compliance in a Digital World.” Email him at [email protected].

View Bio