Auto Lending Fraud Risk Exposure Passes $9B Mark
Point Predictive’s latest Auto Lending Fraud Trends Report finds auto finance sources faced an estimated $9.2 billion in loss exposure in 2024, fueled primarily by credit application fraud.
The report is based on more than 250 million applications and billions of dollars’ worth of documented incidents of fraud and defaults on approved auto loans. Analysts singled out “first-party fraud” — intentional factual misrepresentations made by dealership customers or staff — as the main offender, representing 69% of all loss exposure.
“While dramatic cases of organized crime ring stealing identities make headlines, our data reveals that the true story behind most auto lending fraud is an array of misrepresentations,” writes Point Predictive Chief Innovation Officer Frank McKenna in a release. “Borrowers using their own names who inflate their income, misrepresent their employment, utilize credit washing techniques, or create new credit profiles with Credit Profile Numbers (CPNs) account for the overwhelming majority of fraud risk, yet these patterns often go undetected.”
