Last month, 340 auto loan applications totaling $5.5 million were identified as fraudulent due to a scam that involves altering Social Security Numbers, PointPredictive’s Chief Fraud Strategist Frank McKenna told Auto Finance News.
The scheme, which is expected to increase the risk of fraud for auto lenders, is perpetrated by modifying the last four digits of a legitimate SSN. In some cases, fraudsters will change the digits to match their birth year to more easily keep track of the fake SSNs. “It’s more systematic than just a stolen SSN,” McKenna said. “[Fraudsters] are making it easier on themselves with how they structure this [fraud] by changing the last four digits ever so slightly.”
PointPredictive’s fraud analysts began detecting this pattern Dec. 1, 2019. They discovered that 15% to 20% of the fraudulent auto loan applications using the SSN scheme originated from dealerships, McKenna said, adding that multiple fraudulent SSNs will often originate from a single dealer. “On the dealership level, they can stick out like a sore thumb,” he explained. “The odds of having someone’s year of birth the same as the last four digits of a Social Security Number are slim.”
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