Why Are Fake Pay Stubs Illegal?

For several years now the typical corporate finance department has begun to see a new problem, the practice of using fake pay stubs.  This has taken a toll on accountants, loan brokers, and small business owners and the problem is responsible for the deterioration of the relationships with banks and the lenders, which in turn leads to fines and legal actions.

Reasons For Fake Pay Stubs Scams

Pay stubs are the very basic documents required when seeking credit. These documents are important when applying for a car loan or a subprime auto loan. A pay stub is a proof that the applicant is employed and can be trusted with the loan.

According to industry studies, 80% of fraudulent incomes reported in lending applications are misinterpretations in the original form. This said, customers with no financial source of income or with low income, can find an alternative to faux pay stubs to qualify for a loan.  

Some other reasons why a loan applicant may run into difficulties could be that they have not been in their current job for long enough, they might have a job that pays them mostly in cash or tips, or chances are they also might not have a job.

Mediums By Which One Can Create Fake Pay Stubs

  • While forging pay stubs is not a new concept, today consumers use online sources to create these fake pay stubs through the services of some specific sites that create bogus verifications and references. These websites are easy to use and only require basic information to create a forged pay stub in minutes.  
  • Some video websites have surfaced that can teach anyone with a little interest in how to create counterfeit pay stubs to get a clear pass from the ‘loan authorities.’
  • Some audacious consumers even create their pay stub, which is considered bank fraud and can damage a car dealership or middlemen’s relationships with their banks and other lenders.

False Benefits of Fake Pay Stubs

Consumers are allured with the false privileges of acquiring the desired loan. These include misinterpreted education grades and levels, fake companies, high salaries and duped employment durations, to name a few.  The expectation is that these can help the applicant increase their chances of getting a car or an apartment loan and get better terms and qualifications for the intended loan.

Unfortunately, these forged documents pose a major risk to lenders if they go unnoticed and can result in the deterioration of the lender, middleman and of course, borrower relationship. For a middleman, such as a car dealership, loan broker or rental management company, these relationships are critical to their success, and so one has to be aware of the consequences of these frauds.

Results of Getting Involved In This Forgery

Income fraud is the easiest to perform and the most difficult one to be identified by the lender, but before going any further with this process, one must know that creation of any such phony pay stub is illegal and absolutely off limits! This can result in a misdemeanor and felony and can cost offenders incarceration and fines, not to mention it can put the business in jeopardy if it knowingly accepts these fake pay stubs. Such things as felonies are not something you want to carry around with you as they are pretty hard to get rid off.

How to Outsmart the Fake Pay Stub Scams

The best way to avoid falling into the trap of these scams is being aware of the math behind your pay stubs as you can then tell when your online pay stub provider is calculating inconsistent deductions. If the numbers and decimals do not line up, you are probably looking at a forged pay stub. To minimize how frequently businesses do encounter fraudulent paychecks in the future and to curb these cases, proper verification should be conducted about the income and background of the applicant.  

By taking careful and cautious steps, anyone can avoid this growing problem. Since you read this far, you are serious about taking control of your finances and learning more about your paycheck stubs.  Paystubmakr.com allows you to instantly print paystubs calculated with industry standard taxation schedules through a partnership with the official tax code provider.