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Analytics firm Point Predictive estimates that auto lenders' losses from deception may grow to $6 billion in 2017, double the $3 billion in 2015. Fraud rates are approaching 1%, which was a key level observed in mortgage fraud in 2009.
Point Predictive has put together a consortium of lenders to share data about dealers and loans. The group, now 13 strong, met at the headquarters of Santander Consumer USA in Dallas last month. Common types of fraud include borrowers lying about their income and their jobs, including falsifying paystubs. Loan applications can also include bogus information about the type of car being financed, or its value. The deception can be perpetrated by consumers, or car dealers, or both.
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