Auto lenders polled by artificial intelligence and data provider Point Predictive for its 2023 Auto Lending Fraud Survey fear worsening economic conditions could push loan fraud and defaults higher this year.
The survey showed 70 percent of auto lenders are preparing for a declining economy this year compared with 2022. Another big concern was that fraud was on the upswing.
One in four lenders surveyed said they are not tracking fraud as soon as it occurred, with 35 percent of lenders saying their frontline employees — underwriters looking at the loans before they are funded — are not trained or prepared to investigate or identify fraud. Only about 30 percent of lenders reported using the U.S. government's fee-based electronic system called eCBSV to confirm borrowers' social security numbers are legitimate. The eCBSV launched in June 2020 to help stop synthetic identity fraud.