Scammers with car loans staying busy

What is hot is hot.

Like hot performance cars where scammers fight with car dealers through loans taken under false pretenses.

Many of the intriguers choose muscle cars, says Frank McKenna, head of anti-fraud strategy at Point Predictive, a technology company that targets offenders looking at the dealership stock.

“The Dodge Challenger and the Dodge Charger are really favored,” he says of two sports cars on the thieves’ wish lists. “They tend to like muscle cars.”

Some scammers go for luxury vehicles. “Land Rovers and Mercedes-Benzes are popular,” McKenna said (image, bottom left) says Wards. “But paradoxically, ordinary cars, like the Toyota Camry, are also targets.”

Frank McKenna Point Predictive.jpgPoint Predictive uses artificial intelligence and data analytics to help lenders avoid fraudulent scams that provide false credit information, from fake executives to fake IDs to fake workplaces.

Sometimes offenders act individually, falsifying loan application numbers to obtain personal vehicle ownership. Other times they belong to criminals “who are naturalized and take luxury cars,” many of which end up abroad, says McKenna.

Some garden variety cheaters are aided and abetted by unscrupulous dealership financial managers who do everything they can to close a deal. This is rare today. “Most marketers are honest,” says McKenna. “Only 3% have fraud risks we have identified.”

Point Predictive uses 85 data points in the machine learning system to detect fraud. “We train models to detect patterns,” says McKenna. An example: when one goes from dealer to dealer, claiming different incomes in each of them.

Such a detected perpetrator gave himself a huge boost along the way, with his alleged profits ranging from $ 100,000 to $ 300,000.

Such illegal activities are on the rise, according to Point Predictive Auto Fraud Trends 2022.

It details the record levels of attempted car loan fraud in 2021. The company believes it will continue to grow this year.

“The pandemic laid the groundwork for the growing risk of fraud in 2021, as fraudsters learned to use falsified information and identities to take advantage of unemployment and wage protection programs,” says McKenna.

The auto loan fraud activity was estimated at $ 7.7 billion last year, “a number that we unfortunately expect to continue to grow,” he says.

The main findings of the report include:

  • More than one in five lenders reported that fraud was a significant threat to their organization in 2021.
  • False income claims, misleading employment statements and synthetic identity were the main factors that contributed to the increase in car loan fraud last year.
  • More than $ 1 billion in loan application value has been linked to fake employers.
  • Counterfeit and counterfeit payroll and bank copies increased by 22% in 2021 due to higher unemployment rates and rising car prices.

Point Predictive fraud analysts last year identified more than 16,641 suspicious loan applications with common features of job creation, income manipulation, synthetic IDs and straw lending.

These findings represent a 260% increase in detected fraudulent loan statements and suspicious loan application activities compared to 2020.

Improved technology makes the modern world move, but with increased risks. “Digital automation and the transition to digital lending pose unique challenges for lenders,” said Tim Grace, President and CEO of Point Predictive.

He says “pressure on lenders to expand their automation efforts as Gen Z and Millennials become the majority market.”

The misleading employment statement has increased by almost 400% since Point Predictive first started monitoring it in 2019.

Some fake companies are set up as fake employers who for a fee verify that a loan applicant who is trying to get a loan quickly works for them.

If these fictitious companies are called, many of them do not give up. Instead, they set up new illegal businesses.

The scammers themselves are often stubborn, too. Point Predictive found one who filed 96 applications with different fake employers. The potential value of the loan was over $ 1.7 million.

Steve Finlay is a retired Wards editor. It can be accessed at [email protected].

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