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Auto Loans Vulnerable to Fraud

Survey shows the segment is particularly vulnerable and is suffering the most losses.

October 18, 2024
Auto Loans Vulnerable to Fraud

For the fourth straight first half-year period, automotive lenders were the most exposed to synthetic identity fraud.

Credit:

Pexels/Sora Shimazaki

1 min to read


The auto lending sector is a particular target of fraudsters, including those who create synthetic identities, according to a new study that found overall business risk exposure hit a new high in the first half of the year.

The TransUnion researchers surveyed more than 800 business leaders in the U.S., Canada, the United Kingdom and India that found fraud losses totaled about 7% of their companies’ revenue, or $359 billion. U.S. losses alone totaled $112 billion.

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For the fourth straight first half-year period, automotive lenders were the most exposed to synthetic identity fraud, representing $2 billion in losses, double that of the bank card segment, TransUnion said.

“Fraudsters are increasingly using synthetic identities to accumulate balances, particularly targeting the auto industry,” said TransUnion Global Head of Fraud Steve Yin in a press release on the results. “Unfortunately, this warrants attention as the market is now facing a rising threat of charge-offs.”

Of all survey respondents, 75% said every type of fraud either increased or stayed flat, and almost half said that “authorized fraud,” or getting tricked into giving up something of value, increased the most year-over-year. It was also the most commonly cited reason for fraud losses, at 31% overall and 35% in the

DIG DEEPER: Preventing Bank Fraud

 

 

 

 

 

 

 

 

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