Pelican Rejects Loans Amid Record-High Fraud

Pelican Auto Finance LLC is experiencing the highest level of fraudulent paystubs “that we’ve ever seen,” resulting in higher return rates for the subprime lender, Scott Schauer, chief operating officer and chief risk officer, told attendees at AFS 2016.

“It’s so simple, you just go on the internet and create your own (paystub),” he said. “We even have fake companies that provide fake paystubs, and you call the phone number and they will vouch for that person.”

However, the paystubs are not always actual fraud, he added. The customer may have that job and make that money, but they don’t have paystubs.

No matter the case, “we can’t be comfortable moving forward on that deal, because we are not sure,” he said. “Unless we are 100% sure, we have to pass on that deal. So that results in higher return rates because we can’t verify their income.”

Has Pelican gotten better at catching fraudulent paystubs? “I don’t know,” Schauer said. “It could be a result of more people doing it, or we are catching it more. But it’s going on, and it seems to be getting worse.”