Yet another former employee of a Red Rock auto dealership has contacted AnneLandmanBlog wanting to unload about what they experienced while working for Red Rock, and wanting others to know how business is done at these dealerships. This person has more detailed knowledge about financing of vehicle deals. Their name is withheld at their request. I asked this person follow-up questions based on information provided by a previous Red Rock employee who came forward and told about the illegal acts allegedly taking place at the dealerships, like falsifying customers’ financial information to lenders, misuse of digital signatures, forging of signatures, and more. This new person has even more detailed insight into these dealerships, the things they do to customers and banks, and how and why Red Rock dealerships operate so differently from other dealerships in town and around the country.
The conversation lasted about an hour. The following represents about the first 30 minutes. I edited it slightly to improve readability and clarify what is being discussed.
Important points to keep in mind before reading this:
1) The Red Rock dealerships are affiliated with the Tim Dahle dealerships around Salt Lake City, Utah, and,
2) When the speaker refers to the “right way” to close a deal, they mean showing customers all relevant information about the deal including all figures, giving them a choice about whether or not they want to include expensive extras, like extended warranties, gap insurance or maintenance contracts, and making sure they know the prices of these items and are fully aware of what they are committing to when they sign documents, and
3) The “wrong way” to close a deal means keeping financial information hidden from customers throughout the negotiation, talking only about a monthly payment and not disclosing the full amount the customer will be committed to to pay for the vehicle, not disclosing extras tacked onto people’s contracts without their knowing, or their costs, like extended warranties, key fob insurance, protective coatings and sprays, maintenance contracts, etc., or doing fraudulent things the customer cannot see, like misrepresenting their income to potential lenders on credit applications, adding customers’ signatures to documents electronically, without them knowing, or forging customers’ signatures on documents like contracts, titles and powers of attorney.
Well worth the read if you’re thinking about buying a car here in town.
Red Rock now owns the Honda, Hyundai, Kia, Nissan and GMC dealerships in town.
Q: So the last thing I asked you about was who instructs employees to falsify customers’ financial information to lenders?
A: It’s not necessarily a thing that someone says. It’s difficult to explain to someone who doesn’t quite know the car business, but basically all the bad things fall on the finance manager, because that’s the person [whose name is] on the paperwork, right?
There’s really two types of finance managers: There are real ones that know the job, know what to do [and] how to do it the right way. It’s not the easy way to do it, because sometimes people don’t want to buy the stuff you’re trying to sell them. But there’s a right way to do it to make money. There’s a wrong way to do it, and they make money, too. But the problem is [the Red Rock stores] just don’t have real finance managers, and I think it’s on purpose. So [at Red Rock,] basically it’s like… when [the salesperson] hands this finance manager a deal, and the lady is 65 years old and all she has is Social Security, but she has an 800 credit score, right? So [she has] 900 bucks a month, she can’t buy a car, but she’s here to buy a car, and they want to make money, so they give the sales managers — the Brantleys [Brantley Reade], the Marks [Mark Ingleby], Jose’s [Jose Ubiera], the Cords [Cord Adams] — and those were the people that were doing all this stuff back in the day in Salt Lake that was illegal. Now they’re the ones in charge of making these deals go through, right? So they’ll hand that deal to that finance manager, who, like … He knows it’s wrong, but he doesn’t know right from wrong. So they’re gonna just … it’s something that’s expected of them to do with that group. It’s not something that they, like, you know, it’s never said [to an employee] like, “Here, make the income like this.” It’s just something that you know if you don’t do it, they’re just gonna fire you and find someone that will do it.
Q: So falsifying customers’ financial information is considered a trick of the trade they’re expected to use.
A: Yes. Okay. Yes. Like I said… It’s just that their culture is one of doing it the wrong way, and that’s how you get into like, the iPad thing, I’ll be honest. So, I’m from [another chain of dealerships in another part of the country] where they have video cameras, they record all the transactions between the finance managers and the customers. So I’ve learned to do it the right way. So going into this, it’s like just a culture of them doing it the wrong way. And the people that actually are in place, who set policies, they are the ones that back in the day were doing the illegal stuff, and now they’re the ones that are actually running the day-to-day stuff [at the Red Rock stores]. So they just have this culture of “This is how we expect you to do it, and if you don’t want to do it this way, we’ll find someone [else] to do it.” And that’s honestly why it’s really… not like a gang, but like a fraternity of managers, it’s all people that worked together in Salt Lake. They’ve just been around each other a long time, and this is how they do it.
Q: So you have a culture in dealerships, and some are more honest and others are not.
A: Yeah, yeah, for sure. But I will say that from the stories I’ve heard from the Salt Lake [Tim Dahle] stores, it all seems for the most part to be the same. Now definitely more so …It seems like the people that came out to Grand Junction from Salt Lake to run the day-to-day stuff were the worst culprits. And it makes sense why they would move them out here from Salt Lake for the new stores. I mean, I get that part. Like, you’re loyal to these people. But why would you want them to still control all the dealerships making your money right now? “We’ll just have them go to Grand Junction and see how it is.” But they’ve just been doing it the wrong way, because that’s the way it is with them.
Q: And what about going so far as to forge people’s signatures? Tell me about that. How often does that occur, how has it been that they haven’t gotten caught doing this?
A: Well, so that [involves] a number of reasons. One is because they might have just forgotten [to get someone’s signature]… But it’s never good. There’s never an excuse to sign someone’s signature. I never have, never will. I know people that never have, never will do that. And I do know people that have, and do [that].
Some people will try to justify it to themselves. They’ll say, “Well, I’m just signing their name on stuff that doesn’t matter,” like an agreement to provide insurance or something like that, that has nothing to do with numbers. But either way, you’re still signing that customer’s name. Other ones blatantly do it because they don’t know what they’re doing. So, like I’ve said, that’s the type of person, like the finance manager that says “okay, come sit down in my office.” That salesman gives me your folder before you sit down in my office and he tells me “Hey, this is how we closed her,” so this is what she thinks that she’s closed on. She thinks she’s paying $580 a month for this car…maybe she doesn’t even know the terms. Maybe [the sales person] will just come back and say “Hey, all we did was, she signed [the papers] and then we just told her was $580 a month with three grand down.” Cool. So that finance manager [arranges for a loan term of] 84 months. [She doesn’t] know that anyway. You’re at $580 a month but [she has] no idea what’s in the paperwork. So … whether it’s on an iPad [or on] paperwork, right? So it’s fine if that finance manager is the type that’s okay with signing someone’s name, if he thinks that we’re [at the point in the deal where we’re] getting up to a form that breaks out all the numbers — ‘cause there’s only a couple of forms that break out all the numbers. Everything else is title stuff and stuff that has nothing to do with the actual numbers, right? Or it’s the warranty stuff. So if I’m at this form that breaks all the numbers down, and I know [that] you’ve been reading most of the paperwork, but I know that when you get to this form, you’re gonna see all these numbers, and then you’re gonna say “No,” and kick out all this stuff [that you were going to buy], and [now] we’re not gonna make any money, right? Well, that finance guy is just gonna skip that paper and keep going and then sign it at the end.
Q: So it’s very common not to show people a breakdown of what they’re actually paying for. In fact, [salespeople] try to withhold that?
A: I would say it’s more uncommon to actually sign it for the customer. The more common thing is to get the customer to sign it without going over the form. So a real finance manager’s real job is to go over all the paperwork and numbers for you, and then try to sell you the stuff, after the first job, [which is] just to make sure you have a secure deal and you know everything about the numbers. Now there’s other people that, I mean, when they’re buying a car [the salespeople] take advantage of their emotions, because they’re excited about buying the car, and you have finance managers that will take 10 minutes on someone, they don’t go over any forms, they just say “Sign here,” and then that’s where you get the “Oh, I looked at the paperwork a week later and saw this stuff.” That’s the thing that happens, more so than actually forging someone’s signature
Q: So people find out later after they leave, they examine their paperwork more closely and find out that they got a bad deal or got taken advantage of?
Q: I see. Let’s go back to talk about falsifying people’s income. I’ve heard about this system called CUDL, the Credit Union Direct Lending system.
A: Yeah. That’s basically a nationwide system, not specific to Red Rock. So there’s basically two systems, DealerTrack and CUDL. CUDL basically has all our credit unions. So if you come in to buy a car, it’s how you submit a deal to a lender, basically. It’s like if you go to Rocket Mortgage or Quicken Loans, and type in all your info, and then you see all these lenders that are willing to give you money for a mortgage. That’s what CUDL is. You submit a deal through CUDL to basically whatever credit union you want, and CUDL [is] where, yes, the finance guy does control the information sent to the bank. And it’s not just lying about income, either. It’s also lying about what the cars are worth, too, because a lot of times they’ll do what’s called “Power booking.” They’ll say this car has a sunroof and leather seats and all this stuff [that] adds value to the car, which in turn increases the money the bank is gonna lend me on the car, which means the more money I could put on your loan. Because that bank assumes it has a sunroof and leather seats and all this, and the car’s worth that [amount], but in reality, it’s not.
Q: And they do that in writing to these lenders, using these platforms?
A: I mean, yeah, it’s all digital, it’s all approval. So, like if you go look at CUDL, I could click and look at a deal and [see] who submitted the deal, what info they put into the deal, that they submitted to the bank. And after you sign the paperwork, they do send that signed paperwork to the bank, the forms they need, which would include like, a credit app that I got you to sign that has your fake income on it, or it has the book sheet that has the fake value of the car on it.
Q: So after people sign it, does the dealership add more information to it that the customer isn’t aware of, like this “power booking,” where they add features?
A: Well, the customer never knows what that looks like. What I’m saying is, they’re not just defrauding customers. They’re defrauding banks, too. It [goes] both ways. They’re lying to the customer about what’s on their loan, and they’re also lying to the bank about what the banks are giving for the loan.
Q: And like, what percentage of deals do you think they actually lie on?
A: Oh, probably, well, some would say all of them, but from what I’ve seen with them, on every deal they have [done] the book sheet is probably wrong.
Q: Did you ever see people get saddled with loans a lot bigger than they could handle because of this?
A: All the time. All the time. Well, that’s not funny, but yeah, all the time. All the time. They look at it as, well, this kid, they’re here, they want the car, they told me they could afford a $700 payment. They know how much money they make, right? But at the same time, you’re lying to the bank. I don’t care what your credit is. No bank is gonna give you any amount of money on any car if you make basically 1,000 bucks a month. It doesn’t matter how good your credit is. They’re not gonna give you a loan, because they don’t think you have enough money to pay for the car. But my job, and our job, is to sell you a car, right? The customer probably don’t know [the dealership is] lying about their income or the value of the car. That’s stuff that the customer is not going to know.