Auto Lending Fraud Up
Borrowers seeking to buy vehicles despite affordability issues were the top culprits last year as newer methods increase.
Total auto loan fraud actually fell last year, though that resulted from a decline in origination volume, according to the report. The rate of applications with evidence of fraud rose 6%.
Pexels/Markus Winkler
Losses to automotive loan fraud reached to about $8 billion last year, according to a new study, as restrained affordability came to bear.
The Point Predictive report estimated the industry sustained $7.9 million in fraud losses last year.
It said the majority, or nearly 75% of the fraud, came in income and employment misrepresentation, synthetic identity and credit washing, all of which it said are usually tied to direct borrower fraud as opposed to criminals using stolen identities, though the latter represented 14% of auto loan fraud.
Total auto loan fraud actually fell last year, though that resulted from a decline in origination volume, according to the report. The rate of applications with evidence of fraud rose 6%.
Synthetic identity fraud attempts increased 98%, credit washing 30%, bust-out reports 27%, according to the report.
An emerging threat in automotive lending that has impacted online merchants for years is fraud-as-a-service, or “white-glove” services that offer on social media platforms to commit the crime for the borrower, Point Predictive says.
More Dealer Ops
Dealer Debrief: Defection Data & EV Updates
In this week's debrief, host Lauren Lawrence discusses how to use defection data to your advantage and the latest on EV sales and charging infrastructure.
Read More →
How Defection Data is Bridging the Dealership Conversion Gap
Lead volume is flat, cross-shopping is up and brand loyalty is in retreat. As confident sales teams keep losing buyers they thought they had, daily industry sales data is showing dealers exactly where their funnel is breaking and how to fix it without buying a single new lead.
Read More →
Dealer Debrief: Where are you losing customers?
In this week's debrief, host Lauren Lawrence discusses the hidden leaks in dealerships where you might be losing customers without even realizing it.
Read More →
Dealer Debrief: Improving Your Inventory Management
In this week's debrief, host Lauren Lawrence covers a new survey that shows what service technicians really want and two launches that could help improve your inventory and vehicle life cycle management.
Read More →
Ladies and Gentlemen, This Is a Dealership: Why the Fundamentals Still Decide Who Wins
A teaching moment by a legendary football coach happens to apply perfectly in the auto retail space. Learn what it is and how to use it to your store’s advantage.
Read More →
What Market Timing Mistakes Mean for Your Reinsurance Program
When volatility hits, dealer-owned reinsurance programs face a familiar temptation: pull back and wait for calmer waters. New data from BOK Financial shows why that instinct can quietly cost you years of surplus growth.
Read More →
Dealer Ads and the FTC
The agency has made it clear in recent enforcement actions and warnings, in auto retail and other industries, that advertised prices must include all nonoptional costs to the consumer.
Read More →
Used Autos Supply Dwindles
The March shopping surge, despite high prices, cut into inventory by the most since the thick of the pandemic, Cox Automotive analysts calculated.
Read More →
Managing Risk Effectively Through Changing Times
The variables influencing risk pricing have changed significantly over the past five years. Being proactive and responsive to emerging trends is not optional but essential.
Read More →
Survey Reveals What Won't Fix What's Breaking Car Sales
AutoPayPlus says extra-long auto loans are trapping consumers and threatening the dealer trade-in cycle, and that the industry is leveraging the wrong tools to combat high MSRPs.
Read More →