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.
Originally posted on Auto Dealer Today
More Industry
Structure Leads to Optimized Auto Listings
As the average car-buying journey has shifted to a blend of digital and retail, a dealership’s vehicle listings must be optimized to answer shoppers’ questions clearly and accurately.
Read More →
Consumers Mixed on Economy, Finances
A July survey shows spotty sentiment of current and future conditions, in addition to demographic differences as overall opinion of present circumstances kept sliding.
Read More →
EVs Closing the European Gap
Electrified powertrains led June new-vehicle sales in Europe, reaching 26% of the market.
Read More →
Early Intervention Saves Retention
Sales and service departments have the highest annual dealership turnover rates, according to a new industry report, costing money and time that could be better spent elsewhere.
Read More →
Autos More Appealing
Consumers gave new cars better scores again this year for design, performance and more as mass-market brands kept gaining on premium lineups, JD Power found in an annual poll.
Read More →
Used EVs Defy Overall Market
While the used-car market saw three months of price declines or stagnation, the used EV segment did the opposite – rising for three straight months.
Read More →
Trade-Ins in Negative Equity Reach New Heights
As such trade-ins rise in frequency, so do monthly loan payment amounts and interest rates, according to second-quarter data compiled by Edmunds.
Read More →
Gone to the Dogs
A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.
Read More →
OEM Poll Sees Industry Evolution
Kerrigan Advisors’ survey of automakers finds that tariffs, technology, network tightening and other factors are poised to reshape auto retail.
Read More →
Luxe N.C. Dealerships Change Hands
A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.
Read More →