Landmark Point Predictive Fraud Study Details Record Year of Auto Loan Fraud in 2020

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SAN DIEGO – (COMMERCIAL THREAD– Point Predictive Inc., the San Diego-based artificial intelligence and data science company that helps lenders predict the reliability of loan application information, has released research detailing increased levels of loan claim attempts. loan fraud in 2020, which the company says could continue until 2021.

The Company’s Automotive Fraud Report is the automotive finance industry’s most comprehensive annual app fraud risk assessment. The 2020 edition includes unique information on income and employment misrepresentation, identity fraud and collateral fraud for U.S. auto lenders, as well as the impacts of the pandemic on this important sector of the world. ‘economy.

“2020 has been a pivotal year for fraud risk, with auto loan fraud reaching $ 7.3 billion in origins,” said Frank McKenna, chief fraud strategist for Point Predictive. “The pandemic has increased fear and anxiety and likely made consumers more vulnerable to scams and fraud. The ensuing economic turmoil caused unemployment to rise immediately and dramatically, increasing the willingness of some people to engage in loan fraud. In addition, a flood of stimulus money and generous lender forbearance programs have simultaneously increased the level of fraud while delaying the ability of lenders to recognize it.

Many lenders praised Point Predictive’s research because of the breadth, detail, and depth of the analysis. This year’s analysis drew on the data set from the Point Predictive Anti-Fraud Consortium, a secure and private data science collaboration between dozens of US lenders. The Consortium now includes over 94 million loan requests containing 85 individual data fields on each request. Each month, the activity of 45,000 dealers contributes to a vision of vehicle financing that covers nearly all 157,000 US auto dealers. This dataset tracks more than $ 2.7 billion of known prepayment defaults and the company’s machine learning techniques have generated over 10 billion risk attributes, providing unparalleled insight into risk trends mostly hidden and the ability to predict more frauds than ever before.

“The Consortium’s data is more in-depth and more predictive of risk than any credit bureau or public record source,” McKenna said. He continued, “This vast and deeply specific data on each loan application has given us incredible clarity on the risk of fraud to which lenders are exposed. And one thing is certain: the risk of fraud for auto lenders has increased dramatically as the pandemic unfolds. ”

One of the most significant trends addressed by the analysis was the marked increase in income and employment misrepresentation. At the start of the lockdowns, consortium members were suddenly hit by a 100% year-over-year increase in falsified income and employment claims on auto loan applications, a level of risk that s’ is continued throughout the year. One trend was the use of over 300 new, but bogus employers each month, used by applicants to fraudulently convince lenders of stable revenue streams.

Completing a complex risk picture for those responsible for fraud, the report notes that scams such as synthetic identity creation, credit washing, and even the legal impacts of credit repair efforts complicate the efforts of lenders to prevent themselves. guard against fraud in order to serve trustworthy borrowers faster.

“As a lender, you must remain vigilant at all times. No assumption can be made about a loan application until each has validated a satisfactory fraud review, ”said Steve Christensen, executive vice president of Elite Acceptance Corp. “Point Predictive’s analysis and outlook is essential reading to be prepared. For Elite Acceptance, the critical trends to stay ahead of are dealer implications, such as selling price inflation of more than 10% on the top 10 models, ”Christensen said. He concluded, “I thank Point Predictive for exposing the truth behind what is presented to lenders by dealers and borrowers.”

In addition, the analysis of auto loan fraud in 2020 covers other worrying trends, including fraud clusters in some states and metropolitan statistical areas (MSAs), new tactics used by independent borrowers, model agreements. and ambiguous naming codes for bogus employers, synthetic identity centers, social security number manipulation tactics, vehicles subject to inflated prices, and systematically disputing multiple negative trade lines on a credit report in order to give the impression that the borrower is more creditworthy. Power reservation is also on the rise, with dealers inflating selling prices and forging down payments to increase the chances of loan approval.

Auto fraud report ends with recommendations from Point Predictive fraud experts to stay ahead of fraud in 2021. Tim Grace, CEO of Point Predictive, urges lenders to strengthen defenses and staff against fraud. “In times of crisis, it is often necessary to reduce costs to remain profitable in a context of declining volumes. But this is a mistake. The rate of fraud and risk will increase over the next 18 months, making fraud prevention and staffing one of the most important investments you can make to keep your portfolio healthy. Resist the urge to cut costs where it matters most.

Auto, mortgage, and student lenders wishing to receive a copy of the Point Predictive Auto Fraud Annual Report 2020 should contact [email protected]

About Point Predictive Inc.

Point Predictive enables lenders to fund more loans simply with a unique combination of artificial and natural intelligence â„¢ (Ai + Ni â„¢) to power machine learning technology solutions. Point Predictive helps auto, mortgage, retail and personal loan finance companies identify consumer applications with truthful, reliable information without the intense querying and data verification caused by less technological solutions currently in use. Highly regarded as the most trusted fraud and misrepresentation analysis solutions provider, Point Predictive transformed that trust to allow lenders to simply fund more loans to more consumers. Point Predictive uses powerfully orchestrated big data from millions of examples of true and fake loan applications, billions of derived proprietary data elements, and scientifically-selected third-party data sources to create powerful machine learning models with l natural intelligence added to human experience.

Located in San Diego, California, you can find more information about Point Predictive at www.PointPredictive.com.

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