Lender Checks

[sebastian]

Hi all,


When you apply for a loan the lender requires recent pay slips, group certificates and tax assessments. After they have this infromation do they contact your employer? (Although my boss has never mentioned he got calls from lenders re: me) What do the lenders check, just that you are employed or do they also check other things such as your income, length of employment etc

Just wondering because employers of payroll people have never mentioned income or employment verifications when I have applied for loans.

Thanks



S

 

[geoffw]

My employers and my wife's employers have been contacted by lenders

 

[sebastian]

Thanks Geoffw,

Is this something they do on every occassion or is it just when they feel they should based on the infromation you provide them?
When they called do they just verify that you where infact working there or do they ask further questions?


S

 

[Rolf Schaefer]

Almost all lenders will contact your employer to verify employment.

 

[Qld's007]

Rolf is right most lenders will want to verify the income details by telephoning your employer to verify the details you have given.

This can merely be a confirmation that you are employed to clarification of you the length of employment, position held and weekly / annual income.

In the past we have had clients who have given up work or changed employment after they have lodged the application only to find the loan declined because they failed to tell us. Easy lesson is if you are considering a change of circumstances advise your broker or lender prior to doing so.

 

[pennyk]

phone calls

I'm an employer and I regularly get phone calls from lenders and credit card companies to confirm peoples employment situation. THey have generally wanted to know length of employment and salary. The most hairy situation for me was someone ringing to confirm my husband's salary!! He was an employee in the company I owned. With self employed people, they also check that the business has a listing in the phone directory. We had someone query that, cause we have a company with various trading names, so our company name is not advertised.

Pen

 

[sebastian]

So are employers allowed to disclose your pay information without your consent?
Do you ask the respective employee that it is OK for you to disclose their pay information?
What is to stop someone calling, acting as a bank and asking for these details?

 

[Rolf Latham]

Hi Sebastian

Most employers wont disclose without permission

ta

rolf

 

[pennyk]

usually my staff tell me they are making an application for credit. But I'm not sure what would happen if i didn't know about it.

Pen

 

[Mr Ed]

Sebastian,

Interesting question, When you apply for credit you sign a privacy form, this allows the lender to do the necessary checks, employment, previous credit, council, and what ever else they feel like checking. Many of the checks done years ago verbally are now done more formally, for eg a check with local council that you have your rates paid up to date and that you are the registered owner, is now done by asking for a rates notice. Or if you rent a call to the managing agent for a reference. Now a rent receipt is asked.

Once upon a time a lender would call the outgoing lender and ask for a rating on the conductibility of your account. (this still happens with some lenders today).

Now picture this you are the lender and your customer runs a dreadful account always in arrears always needing calls demanding pmt, what are you going to say when an incoming lender calls and asks for a reference of the account?

You will say the account has never been in arrears and has been conducted perfectly.

Delinquent customer off your hands.

So what do incoming lender ask for now?

6 months of loan statements!

Now if you are an employer and you get a call requesting confirmation of employment be careful on what you say.

Ask them to fax you the applicants privacy form, for authenticity of the enquiry, and do not say that the applicant is on the way out. Reason being the lender will decline the loan saying the applicant is about to loose their job. Broker/bank jonny tells this to the applicant and the employee can have a free shot at the employer.

All fwiw

Mr Ed

 

[sebastian]

Thanks for all your replies people, they are great.
But this sort of brings me back to the beginning, out of all my loan, credit card etc etc applications I have made through my life, no employer has brought any enquiries to my attention, hence, providing information without consent?

 

[geoffw]

When they called do they just verify that you where infact working there or do they ask further questions?

I don't know what questions they asked. My employer might be able to provide more info

 

[Aceyducey]

Thanks for all your replies people, they are great.
But this sort of brings me back to the beginning, out of all my loan, credit card etc etc applications I have made through my life, no employer has brought any enquiries to my attention, hence, providing information without consent?

Sebastian - good question.

The Privacy Act is relatively new & before it existed there were much weaker legislation over what information required consent. May companies still haven't grasped many of the implications.

I'd expect that it was and is no uncommon for personal information to be given out without the express permission of the employee.

My suggestion would be that you always notify in writing the appropriate people in your organisation that <Insert company name here> may be making an enquiry for a <Purpose> & that you authorise them to give the enquirer <Insert appropriate information here>

This protects both yourself & the company from identity thieves & legal issues.

Cheers,

Aceyducey