Thousands of car buyers made up fake employers to secure an auto loan, research shows
Over two years, research found more than 5,000 applications with fake employers, equaling $1 billion in fraudulent auto loans.
It all started with Gran Turismo. From those early PlayStation days, Sean was drawn to anything with four wheels. Prior to joining the Roadshow team, he was a freelance contributor for Motor Authority, The Car Connection and Green Car Reports. As for what's in the garage, Sean owns a 2016 Chevrolet SS, and yes, it has Holden badges.
Some car shoppers are trying extreme measures to secure financing, going all the way to fraud. Point Predictive, a research company reliant on machine learning, says it uncovered over 5,000 auto loan applications tied to fake employers. We're not talking about applicants simply making up an employer's name to jot down on a credit application. The schemes are pretty extravagant.
According to the company's research, published earlier this month, these thousands of applications include a falsified employer complete with a fake website, forged paystubs and other deceptions to pass a credit application. Lenders and dealerships aren't sniffing these forged applications out nearly as well as they need to, and it's costing a lot of money, Point Predictive said: The thousands of applications come to about $1 billion in fraud, total.
Unsurprisingly, applications tied to fake employers have incredibly high default rates. The company estimates the default rate at 40% to 100% for someone involved in one of these schemes. For lenders, it pays to catch the web of falsehoods before releasing funds for something as expensive as a vehicle purchase, especially while credit remains highly accessible to borrowers.
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