Pursuits
Auto Loan Fraud Soars in a Parallel to the Housing Bubble
- Up to 1% of car loan applications include deception, firm says
- Trouble comes after rapid growth in U.S. car loans since 2010
Why Subprime Auto Loans May Be the Next Big Short
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Borrower fraud in U.S. auto loans is surging, and may approach levels seen in mortgages during last decade’s housing bubble, according to a startup firm that helps lenders sniff out bogus borrowers.
As many as 1 percent of U.S. car loan applications include some type of material misrepresentation, executives at data analytics firm Point Predictive estimated based on reports from banks, finance companies and others. Lenders’ losses from deception may double this year to $6 billion from 2015, the firm forecast.