PointPredictive has uncovered an active fraud ring that has targeted at least six lenders, Chief Fraud Strategist Frank McKenna told Auto Finance News.
Over the past few months, PointPredictive’s anti-fraud consortium has discovered more than 75 fraudulent auto loans totaling $1.6 million. PointPredictive analysts notified the involved lenders, which are participants in the consortium, and those fraudulent loan applications have since been thwarted.
The fraud ring activity is largely concentrated in northern California, Florida and Las Vegas, McKenna said, so “lenders that lend heavily in those areas are more likely to be hit.” There are likely another 15 or 20 lenders outside the consortium that are being scammed, he added.
As of Tuesday night, the fraud ring was still active, McKenna said.
The fraudsters generate fake income tax identification numbers, known as ITINs, which can be used on credit applications in lieu of a Social Security Number. They are often held by immigrants or green card holders, McKenna added.
It’s common for lenders to fund loans that have fake ITINs, McKenna said, because the loans still perform. Well-intentioned borrowers might make their loan payments because they want access to a car, he added.
However, “fraudsters are catching onto the trend,” McKenna said. PointPredictive was able to track loans funneling through the consortium and find commonalities to link one fraud case to another. The fraudulent loans would often use the same ZIP code, a similar address, and the same telephone number or similar employer names, usually Uber, Lyft or a construction company.
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