Point Predictive Releases Landmark Study Describing 260% Increase in Suspicious Auto Loan Applications
SAN DIEGO, March 18, 2022 /PRNewswire/ — Point Predictive Inc., the San DiegoThe New York-based company that provides artificial intelligence solutions to lenders, today released its 2022 Auto Fraud Trends Report, which details record levels of attempted vehicle loan fraud in 2021, a trend that Point Predictive predicts will continue to rise throughout 2022.
“The pandemic has laid the foundation for growing fraud risk in 2021 as fraudsters have learned to use falsified information and identities to benefit from unemployment and paycheck protection programs,” said Frank McKenna, Chief Fraud Strategist for Point Predictive. “Now that these government programs have ended, auto lenders are facing an influx of fraud. 2021 was another banner year for fraud risk, with auto loan fraud estimated to reach $7.7 billion – a number that we unfortunately expect to continue to increase.”
The Point Predictive 2022 Auto Fraud Trends Report contains insights from surveys of 29 lenders, as well as a comprehensive analysis of year-end data on auto loan applications, loans and fraud data from the Point Predictive Auto Lender Data Consortium. The report provides the auto lending industry with a comprehensive resource on fraud trends and lender perceptions and attitudes towards fraud.
Key findings include:
- More than one in five lenders (21%) said fraud was a significant threat to their organization in 2021
- Income fraud, employment fraud and synthetic identity were the main causes of increase in auto loan fraud in 2021
- More … than $1 billion in the value of the loan application was linked to fake employers – more than 5,000 fake employers were used by consumers and dealers on auto loan applications
- Fraudulent and falsified pay stubs and bank statements increased by 22% in 2021 due to rising unemployment and rising car prices due to supply chain delays
- Rates of suspicious synthetic identity attempts on auto loan applications rose to 68 basis points from 35 basis points in 2020
The Point Predictive Fraud Analyst team brings the experience and expertise needed to identify, interpret and adapt to rapidly changing fraud trends. In 2021, the fraud analyst team identified over 16,641 suspicious loan applications with a total loan application value of $309 million. These loan applications all appeared to have characteristics of job fabrication, income manipulation, synthetic identities, or manipulation of fictitious borrowers. These results represent a 260% increase in false loan claims and suspicious loan application activity identified in 2020.
“Digital automation and the shift to digital lending create unique challenges for lenders,” said Tim Grace, Chairman and CEO of Point Predictive. “Throughout 2022, we expect to see net losses increase as car prices normalize and pressure on lenders to expand automation efforts as Gen Z and Millennials become the majority market to satisfy their customers, scarcity of inventory creating more opportunities for fraud, and lenders continue to see higher levels of identity theft on their new origins.”
Lenders can download a copy of the 2022 Auto Fraud Annual Report at https://pointpredictive.com/auto-fraud-trends-report/.
About Predictive Point Inc.
Point Predictive delivers a new level of confidence and speed through the unique combination of artificial and natural intelligence using decades of risk management expertise. The company’s technology solutions quickly and accurately identify who is reporting their loan applications faithfully and who is not. As a result, lenders are now able to easily fund loans without asking the vast majority of applicants for onerous documents such as pay stubs, utility bills or bank statements. This improves funding rates by 40-50% while reducing overall prepayment default losses by more than 30%. Borrowers get loans faster and we dramatically increase a lender’s bottom line profits. Situated in San Diego, Californiayou can find more information about Point Predictive at www.pointpredictive.com.
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