Consumer Fraud in the Auto Industry is on the Rise
From duplicating keys to hacking into onboard security systems, there are many ways for criminals to steal a car. In most cases, that takes knowledge of the vehicle’s mechanical and electrical systems, and the know-how to decode or disarm its anti-theft safeguards. However, in increasing numbers, a new breed of auto thief has figured out an astounding number of ways to get reputable dealers to actually turn over the keys to the vehicle they want and watch them drive away.
This happens through a sophisticated type of vehicle fraud that has become the savvy car thief’s preferred modus operandi. According to a study by Point Predictive that surveyed 29 national automotive dealers, 2021 was a record-breaking year for consumer fraud in the auto industry. In fact, data from this watchdog group indicates that the number of people who falsify documents to get approved for auto loans has increased steadily over the past decade, resulting in a loss to the auto industry of $7.7 billion in 2021. The findings represent a 260% increase in loan misrepresentations and suspicious loan application activity identified since 2020. Sadly, the number for 2022 auto loan delinquencies and auto loan defaults is on track to meet or exceed these numbers from last year.
Bay Motor Finance provides vehicle financing within Maryland and Delaware to franchises and independent dealers who help their customers secure near-prime and sub-prime credit. As your preferred partner, our team is always looking for ways to improve our processes to ensure we provide you with the best service possible.
The average funded loan containing fraudulent information represents a loss of at least $21,000. And because 60% of these losses incurred by dealerships were driven by false income, paystub forgery, and employment fabrication, the Bay Motor Finance team looks carefully at every application for vehicle financing that we receive by hand. We crunch the numbers ourselves to ensure your qualified customers receive the streamlined financing to purchase the car they deserve, and your customers who are trying to pull a fast one get caught red-handed. Our team is trained to flag these things that unscrupulous potential borrowers do to misrepresent their qualifications for a loan including:
- Forging paystubs. Up to 10% of paystubs that lenders use to validate a borrower’s income are generated on the internet.
- Forging bank statements. Potential borrowers provide fake bank statements with falsified balances to qualify.
- Forging driver’s licenses. Fraudsters will often create phony driver’s licenses to support their fictitious or stolen identities.
- Forging Social Security cards. Fraudulent borrowers will create a copy of their social security using an SSN they purchased or stole online.
- Falsifying income.
- Adding income from a non-existent second job or a phony business they claim to own.
- Providing a false contact name/number for an employer which will actually be that of a friend who will provide or confirm false information.
- Misrepresenting education or job title.
- Lying completely about true name and identity.
- Creating a “synthetic identity” using a combination of fake and real information to hide their credit history.
At Bay Motor Finance, we strive to be the preferred partner for dealers in Maryland, Delaware, and surrounding areas. We are dedicated to providing full service and rapid funding to your qualified buyers, and helping you weed out the fraudulent borrowers so you cut your losses due to auto loan delinquencies and defaults. Don’t fall victim to the ever-increasing rise in consumer fraud and vehicle funding in the auto industry. Bay Motor Financing is here to help!