Shady credit repair practices, synthetic identity and dealer fraud top the list of fraud trends.
SAN DIEGO, Calif., June 11, 2019 – PointPredictive, the leading provider of machine learning and fraud solutions announced record attendance at its fourth Auto Lending Fraud Roundtable held last week in Plano, TX.
More than 50 attendees from 21 lending organizations, including 5 of the top 10 auto lenders, joined PointPredictive partners including defi Solutions and Digital Matrix Systems to discuss rising fraud trends and to collaborate on how to best address those issues from an industry perspective.
During the roundtable sessions, lenders identified their three biggest fraud concerns for 2019. Their first concern is the dramatic increase in deceptive credit washing where individuals overwhelm creditors with false claims of identity theft to remove legitimate trade lines from their credit. Their second biggest concern is the dramatic rise in synthetic identity which is largely driven by individuals using Credit Protection Numbers (CPNs) to create new credit files under false pretenses. Their third biggest concern is the ongoing and systematic fraud by dealers that results in higher levels of first and early payment default.
The event also included guest speakers Sergeant Darren Schlosser, from the Houston Vehicle Fraud Task Force, and Matt Pannell, former Special Agent with the Social Security Administration, who shared insights into the growth of synthetic identity fraud and credit repair fraud that are sweeping the nation.
“Synthetic Identity is being driven largely by unscrupulous credit repair companies that are convincing ordinary people to commit criminal acts,” said Sergeant Darren Schlosser, Head of the Houston Police Department Auto Theft Division Vehicle Fraud Unit. “Using so-called CPNs to apply for credit under false pretenses is a crime and I’m seeing an alarming increase in the number of vehicle financing fraud cases where this is occurring. I believe collaboration between lenders, law enforcement, car dealerships and others is important in preventing this type of fraud from growing.”
During the event, PointPredictive showcased its groundbreaking solutions including Synthetic ID Alert™, which alerts lenders to potential synthetic identity issues; Auto Fraud Alert™, which provides 100 alerts and red flag indicators to lenders based on comparing and validating information a lender receives on an application against data assets managed by PointPredictive; and Income Validation Alert™, which enables lenders to streamline their income assessment of borrowers.
Glenn Munro, Executive Vice President of defi Solutions, a PointPredictive partner that provides turnkey access to those PointPredictive solutions through the defi SOLUTIONS Loan Origination System, addressed the attendees, “We partner with PointPredictive because we have a common belief that shared fraud intelligence and scoring in real-time is the best way to combat the problem. PointPredictive is doing this the right way.”
At the roundtable, Frank McKenna, Chief Fraud Strategist at PointPredictive, provided insight into fraud trends by presenting results from analysis conducted on more than 70 million historical auto loan applications. The analysis shows that auto lending fraud risk has risen by at least 38% in the last seven years and that fraud origination risk is expected to reach $7 billion in 2019. His analysis further showed a dramatic 140% increase in synthetic identity risk patterns in auto applications since 2016. His research demonstrated that the drivers behind the rising levels of fraud risk were the growth in sharing of fraud methods on social media, the increase in lending to borrowers with lower credit ratings, and the billions invested in fraud controls by other industries which have had the effect of pushing fraudsters toward auto lenders and dealers.
“We appreciate the collaboration that PointPredictive enables through their consortium in addressing our key fraud pain points at these roundtables,” said Jorge Arenado, AVP of Originations at Westlake Financial. “Their focus on both first- and third-party fraud, and not just identity theft, helps the auto lending industry target all the fraud we experience including income misrepresentation, dealer fraud, straw borrower and fraud ring activity. The chance to discuss all of these issues with our peers is a big benefit in helping us shape our future fraud strategies.”
“We learn quite a bit from the PointPredictive roundtable each year,” said Mickey Watts, SVP at Anderson Brothers Bank. “As fraud continues to morph and change, we are able to meet and discuss the changing fraud patterns with other lenders and discuss best practices and how to use the PointPredictive products to our best advantage.”
“Our use of PointPredictive solutions has changed our company’s awareness around stopping fraud and misrepresentation within our portfolio,” explained Eric Lin, General Manager of Universal Finance Company. “The consortium roundtable event is a unique advantage to us and the industry in the fight to protect against financial losses of this kind.”
The roundtable, the fourth of its kind held by PointPredictive, continues to grow as more lenders collaborate to address fraud.
“The growth of our consortium and record attendance this year indicates that we’re on the right track in our approach to help solve auto lending fraud,” said Tim Grace, CEO of PointPredictive. “When we launched the auto fraud consortium two years ago, our mission was to bring the industry together in the same way we did in the past at other companies to address fraud in mortgage and credit card. Since fraudsters and unscrupulous dealers attack lenders serially, it is only through collaboration that the industry can address the issue. Our solutions are now scoring over 1.5 million new auto applications every month using shared machine learning models. We’re very proud of our growth and the positive effect we are having in the industry.”
For further information on PointPredictive solutions or to join future Auto Lending Fraud Roundtables, contact PointPredictive at [email protected].
About PointPredictive, Inc.
PointPredictive, Inc. is a leading provider of fraud solutions to banks, lenders and finance companies. It solves the billion-dollar fraud problems of auto lending, mortgage lending and on-line retail fraud with the latest technology platforms, smarter science and business experience by leveraging big data with analytic models. Located in San Diego, Calif., more information about PointPredictive can be found at www.pointpredictive.com.
Ray Public Relations