NICB Estimates Auto Lending Fraud Exposure at $10.4 Billion

The National Insurance Crime Bureau (NICB) estimates that national fraud exposure in auto lending has reached $10.4 billion, the organization said in a press release. Criminal networks are using AI generated documents, automated bots and synthetic identities to obtain vehicle financing.

Citing recent industry studies, NICB says up to 24% of auto loan defaults may be connected to fraud, while 77% of dealerships reported increased fraudulent activity during the past two years. First party fraud, including false claims about income, employment or repayment intent, accounts for nearly 70% of vehicle finance fraud.

Applicants flagged as likely synthetic identities default at 12.5 times the rate of typical borrowers, with average losses ranging from $22,000 to $50,000 per case. NICB estimates synthetic identity fraud supports 80% to 85% of identity based vehicle financing schemes.