Fake jobs a real problem on auto loan apps

More than 5,000 fake employers have appeared on auto loan applications over nearly three years, according to the fraud screening firm Point Predictive.

The deception was associated with about $1 billion worth of loan value from February 2019 to December 2021. Point Predictive estimated that the volume of loan applications listing fake employers grew from $7 million per month to $35 million per month during that time.

"We're uncovering about 100 new fake employers that are being created each week," Point Predictive senior fraud analyst Justin Hochmuth said in a statement.

Thirty percent of loans with a fake employer wound up charged off, several times the rate of loans citing true employers, according to Point Predictive.

CEO Tim Grace said some of the phony companies' supposed work forces are defaulting on loans 40 to 100 percent of the time.

Not all the applicants with phony employers are committing "fraud for profit," such as a criminal enterprise financing vehicles it intends to default on and sell off, said Point Predictive Chief Strategist Frank McKenna.

Some fraudsters just need a car and might try to make payments on it.

"They're well intentioned," he said of such "fraud for car" applicants, but they might not be able to afford the vehicle.

The Dodge Charger, Nissan Altima, Hyundai Elantra, Chevrolet Malibu and Dodge Challenger, in that order, represented the most popular models consumers attempted to finance citing phony employers, according to Point Predictive. McKenna said he expected the list to be all muscle cars and luxury models and that the appearance of the more mainstream vehicles might reflect the distinction between professional thieves and people who just need a car.