SAN DIEGO, March 25, 2025 (GLOBE NEWSWIRE) -- Point Predictive, the leader in artificial intelligence solutions for consumer lending, today released its comprehensive 2025 Auto Lending Fraud Trends Report. Drawing from an unprecedented dataset of over 250 million historical applications and billions in reported fraud and defaults, the report reveals that auto lenders face an estimated $9.2 billion in fraud loss exposure for 2025 – the highest ever measured.
The comprehensive report analyzing fraud patterns on $4 trillion of submitted loan applications reveals that first-party fraud—where borrowers or dealerships misrepresent information to lenders—accounts for 69% of the $9.2 billion fraud risk exposure that the auto lending industry faced in 2024.
"While dramatic cases of organized crime ring stealing identities make headlines, our data reveals that the true story behind most auto lending fraud is an array of misrepresentations," said Frank McKenna, Chief Innovation Officer of Point Predictive. "Borrowers using their own names who inflate their income, misrepresent their employment, utilize credit washing techniques, or create new credit profiles with Credit Profile Numbers (CPNs) account for the overwhelming majority of fraud risk, yet these patterns often go undetected.”
Some of the revealing statistics include the following:
- First-party fraud and misrepresentations dominate the landscape, with income and employment misrepresentation accounting for 43% of total fraud risk ($3.9 billion).
- Rising Default Risk: Point Predictive’s Early Payment Default Risk Index has increased 25% in the last 24 months.
- Bust-out fraud has grown by over 26% in the last 24 months as the economy softens and more people resort to monetizing cars.
- Systematic Dealer Risk, such as repeatedly inflating car values and using fake employment for borrowers, increases lenders' default risk for those dealers by as much as 500%.
The report also explores emerging threats, including the explosive growth of AI-powered fraud tools and their potential impact on lenders in 2025 and beyond. An analysis of criminal Telegram channels revealed a 644% increase in conversations about AI and deepfakes used for fraud between 2023 and 2024, featuring sophisticated schemes such as synthetic identity generators, deepfake videos aimed at bypassing identity verification, and AI-generated counterfeit identification documents.
"This year's report represents our largest analysis of auto lending loan data to date," said Tim Grace, CEO of Point Predictive. "The extensive scale of our consortium and proprietary risk data provides us unparalleled visibility into fraud patterns that lenders’ own data simply cannot reveal. This data enables us to provide solutions that assist lenders in funding loans that do not contain fraud and misrepresentation while avoiding the losses associated with the array of hidden schemes that can lead to defaulted loans."
Point Predictive actively assists lenders and dealers in combating these evolving fraud threats with its comprehensive suite of solutions. The company's AutoPass™ product uncovers hidden default patterns using sophisticated fraud and early payment default scores complemented with more than 120 risk alerts. It allows lenders to securely automate up to 80% of lending decisions while preventing 40-60% of early payment defaults.
For dealerships, BorrowerCheck™ protects against both first and third-party fraud, helping prevent costly buybacks from lenders and providing faster and easier responses from lenders. This allows dealers to sell more cars faster and safely.
Additionally, IEValidate™ is helping lenders and dealers safely validate income and employment to avoid fake employers, forged paystubs, and document fraud. Compared to other solutions, IEValidate is much more affordable and provides higher response rates and better accuracy.
The 2025 Auto Lending Fraud Trends Report is available now via the link https://landing.pointpredictive.com/auto-lending-fraud-report-2025
For more information, contact info@pointpredictive.com.
About Point Predictive
Point Predictive powers a new level of lending confidence and speed through the unique combination of artificial and natural intelligence using decades of risk management expertise. The company's data and technology solutions quickly and accurately identify truthful and untruthful disclosures on loan applications. As a result, lenders can fund most loans without requiring onerous documentation such as paystubs, utility bills, or bank statements, improving funding rates by up to 50% while reducing overall early payment default losses by more than 30%. Subsequently, borrowers get loans faster, and lenders realize a more profitable bottom line.
Media Contact: Jill Robb jrobb@pointpredictive.com
