Don’t Lie on Your Credit Card Applications

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Don’t Lie on Your Credit Card Applications

Million Mile SecretsDon’t Lie on Your Credit Card ApplicationsMillion Mile Secrets Team

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[Disclaimer:  I’m not a lawyer, so nothing in this post should be considered as legal advice.  Please consult your lawyer for legal advice specific to your situation.]

Don’t lie on your credit card, or on any application for credit.  It is fraud and you could get prosecuted for it!  Sure, the chances of being prosecuted are extremely slim, and likely only if you don’t pay back your credit card debt and declare bankruptcy.

But why take the chance of spending time in jail?

Don't Lie on Your Credit Card Application
Don’t Lie on Your Credit Card Application

David Gaylord entered incorrect information about his income on 3 credit card applications from Advanta, Family First Federal Credit Union, & Bank of America.  According to this Department of Justice press release:

The defendant indicated that his income was anywhere between $90,000 to $122,000 when, in 2006, he reported to the Internal Revenue Service that his income was approximately $12,488.  Gaylord ended up leaving outstanding balances on the various lines of credit and filed for bankruptcy.

Gaylord charged up his credit cards, but was unable to pay them back and eventually declared bankruptcy.

He later pleaded guilty to bank loan application fraud which has a penalty of up to 30 years in jail and a $1 million fine.  He was actually sentenced to time served and 5 years of supervised release together with $46,914 in restitution.

Here’s a link to the specific section of the US code which makes lying on credit applications an offense.  And here’s a link to a study which suggests that 45 million folks (looks too high to me) deliberately manipulate their identity.

 What Does This Mean?

Quite simply:  don’t lie on your credit card applications.  Don’t say you’re employed when you’re not.  Or that you earn more than you actually do.

American Express occasionally conducts financial reviews where they will ask you to verify your income by sending them a copy of your tax returns.  And if your income doesn’t match your tax returns, they either slash your credit lines or close your credit cards.

Many banks will not prosecute you for fibbing on a credit card application, but they could prosecute to make an example of you or if you don’t pay back your debts and declare bankruptcy.

If you apply for a business credit card, don’t over state your income.  Many folks get approved for business credit cards even if they show annual revenue of $0.

Miles and Points are wonderful, but they’re not worth lying about.

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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To Bob, Scott (in the very beginning of the posts) and the others it WAS very Interesting how this made it to a Federal Court Case! And. just FYI the Income I used was my actual “Business Income” from my Real Estate Business, and ALL of these applications were taken over the phone after they kept hounding me, to provide me credit. Granted they wanted my net personal income…but kept calling my business office weekly and some daily, and just wanted my income. I’m sure it was one of my “Agents” I had to let go in very bad terms that brought this all to life. Bob and Scott are very correct in stating this doesn’t just become a primary FBI case all by itself, for a lil’ small country Real Estate Business owner that never had ANY for of Criminal past ever in his life. Thank you.

what income would i need to qualify for the platinum card by american express?

if you are being supported by a third party, and they’re giving you money to live, can you include that as income?

Million Mile Secrets

@Steve – Could be possible.

Two questions that are on my mind now-

1. What about cards applied for before the new regulations required individual income be listed? I have a Costco AmEx that I’ve basically been walking on eggshells with because when I applied for it, the person signing me up told me if I applied right then I was allowed to include their income at the time, but not for much longer if I wanted to wait. I’m trying to lay low by not applying for any other cards with them and keeping a spotless history on my other cards, but I worry because it’s my oldest card (yes, I managed to get an AmEx as my first own-name card) and as such, I definitely don’t want to lose it.

2. I am also in the unusual and fortunate situation of going to school, but having tuition and living costs paid for by family- as things are now, I run my tuition and other costs on my cards and get money from them to pay it off, which makes meeting minimum spend on personal cards a cinch twice a year. Do I get to count this as income? I did back when the AA 75k mile offers were in effect, but with this post, I’m kind of scared.

@traderprofit the fbi generally handles the fraud investigations along with the bank regulators (OCC). The bank regulators (OCC) generally don’t refer too many cases for prosecution since every politician allows their ability to regulate to diminish. Ever since GHWBush’s administration prosecuted the S&L’s, the number of OCC referrals for prosecution has declined with each successive presidency (Clinton, GWBush, Obama). It used to be that banks had at least some leeway in picking their regulator as well. The fbi focuses most of their limited resources on consumer fraud, instead of institutional.

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