Analyst outlines steps to expand fraud detection | Auto Finance News | Auto Finance News

Analyst outlines steps to expand fraud detection

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Auto lenders attempting to combat fraud may be going about it the wrong way, according to a data scientist specializing in fraud trends in financial services. 

“Do not limit your focus to fighting fraud,” said Josh Wortman, General Forensics’ chief data scientist. “You should really cast a wider net and try to identify any suspicious and risky activity among dealers,” he said, adding “suspicious activity quickly turns into fraud if left unchecked.” 

Tune into “The Auto Finance Roadmap” to hear the latest podcast featuring General Forensics’ Josh Wortman outlining fraud trends and best practices. 

Suspicious behaviors can vary but if, for instance, a dealer repeatedly submits loan applications for cars not listed on their website, lenders should verify the cars are real in order to ensure there is no vehicle or title fraud issue, Wortman said. Likewise, if a dealer hasn’t added inventory to their website for a few weeks, lenders should be suspicious that the dealer is having operational or financial problemsDealers submitting many variations of loan applications for one applicant is another red flag. 

“You should be suspicious the dealer is trying to make borrowers appear qualified, but in reality, they are fudging the numbers,” Wortman said. “You need to be suspicious about what is happening and investigateBe prepared that what comes next may not be good.” 

If suspicious behavior is detected, Wortman said, lenders should have an open and transparent conversation with dealer partners and encourage them to correct it. If that approach fails, it’s worth it to break ties with that dealer.  

“Ultimately, if you only do business with healthy and transparent dealers that you trust, you can build a nice protective moat between your finance company and actual fraud,” Wortman said. 

For more content like this, join us at the upcoming Auto Finance Sales & Marketing Summit, March 9-10 at the Omni San Diego. Register before Friday, January 31st to save with early registration rates. Visit www.SalesAndMarketingSummit.com to learn more.

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