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Games Dealers Play: Powerbooking


Powerbooking is one of the most common types of credit application fraud that car dealers commit. A car dealership powerbooks when it tells a bank or finance company that a car or truck is loaded even though it does not have many of the options that are described.

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For example, some dealerships will tell a bank that the car that a consumer wants to buy has options such as a power moonroof, leather seats, navigation, alloy wheels, or a premium sound system, even though the car is a base model with no added features. This happens frequently with used cars, including former rental cars, that are base models. Dealerships do this so that the bank will think that the car is worth thousands of dollars more than its real value.

Usually, a dealership will powerbook in order to persuade the bank to fund a motor vehicle purchase in which it is overcharging the consumer.  The bank is harmed by this fraud, because the collateral for the loan is worth much less than the bank believes. Consumers are also harmed by powerbooking, because they will owe much more on their car loans than the value of their cars, and it will be years before they will be able to refinance, sell, or trade-in their cars. 

Sometimes, a car dealer will tell a car buyer that someone from the bank might call aand ask whether their car has premium options. Such a request is a giant red flag that there is a serious problem with this purchase. It is illegal to make false statements as part of a credit application, and no consumer should be asked to lie in order to get approved for a loan. Consumers who are asked to lie should consult with an experienced attorney as soon as possible.  

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