2021 In Review: Fraud Losses Reach New Heights

Auto loan fraud in the United States is a significant problem that continues to grow at a rapid rate. In 2021, Point Predictive estimated that $7.7 billion in car sales would be financed with loans containing falsification on applications, from employment and income misrepresentation to identity and synthetic fraud that would result in a default. The $7.7 billion in losses is the highest estimated loss exposure that the industry has ever faced – a number that has nearly doubled – since Point Predictive began tracking auto loan fraud in 2013. In this presentation, we will share an analysis based on our consortium data to discuss the top auto fraud trends in 2021, forecast the tactics we expect to see from fraudsters in the coming year, and explore ways lenders can reduce losses.

Key Takeaways:

Most lenders focus their fraud risk management efforts on identity-related fraud losses since these traditional third party frauds are easy-to-identify and default at a higher rate. Yet in 2020, this fraud only accounted for roughly 20 percent of U.S. auto fraud losses, meaning 80 percent of fraud losses likely resulted from challenging-to-detect first party frauds.

In this presentation, we will share:

  • Geographic hotspots for auto lending application fraud.
  • The top trends we saw fraudsters utilizing throughout 2021 will continue to be lender’s primary pain points in 2022: income, employment, straw borrower, and synthetic identity fraud as well as credit washing.
Auto Finance Workshop