If she were honest, she’d likely win a hardest-worker-of-the-year award.
But Katy (not her real name) is a con artist who hits up auto lenders and car dealers. Because of her illicit persistence, she wins a dubious achievement award from Point Predictive: The Chronic Fraudster.
The company’s Frank McKenna includes her in his list of five types of fraudsters operating in the auto retail world.
“We presented it at a roundtable to our Auto Lending Fraud Consortium,” he says of the profiling information based on Point Predictive’s data trend tracking.
In addition to the Chronic Fraudster category, the others are:
- The Employer of the Year Fraudster
- The Chameleon Fraudster
- The Unlucky, Lucky Fraudster
- The Stimulus Fraudster
A former bank fraud investigator, McKenna (pictured, below left) is Point Predictive’s chief anti-fraud strategist and co-founder.
The San Diego-based company uses artificial intelligence, analytics and 85 data points to spot auto-loan seekers using false credit-application information, from forged pay stubs to fake identities to phony places of employment.
The company estimates auto-loan fraud activity last year at $7.7 billion.
Its fraud analysts in 2022 identified more than 16,641 suspicious loan applications. Common characteristics: employment fabrication, income manipulation, synthetic fake identities and straw borrowing.
Katy stands out as an overachiever among McKenna’s con artistry profiles.
“She appeared the most of any other person in our data,” he says.
In six months, she applied for 104 loans using 100 different Social Security numbers, 10 different jobs and 34 different addresses. She sought a total of $2.9 million in loans from 13 auto lenders.
“Some actually went through,” McKenna says. “These fraudsters go from lender to lender looking for weak spots.”
She essentially uses synthetic IDs which contain different information such as addresses and Social Security numbers that are patched together. That differs from the outright theft of another person’s identity.
Katy’s fake loan applications were done online and sometimes in person at dealerships.
Seeming like a twisted version of the Oscar awards, here are the other con categories McKenna put together:
The Employer of the Year Fraudster
Point Predictive has flagged 1,247 auto loan applications totaling $22 million from people purporting to work at a small computer storefront shop. Some of the loans were funded.
“Most likely, someone is in the backroom creating fake pay stubs for someone who wants an auto loan,” McKenna says.
The shop also allegedly sells fake IDs and fields lender phone calls seeking employment verification.
Several other shady operators run such fake-employer services, according to Point Predictive. “We have about 7,500 in our data base but this was our most significant one,” McKenna says.
The Chameleon Fraudster
“Their motto is, if at first you don’t succeed, try again,” McKenna says. They don’t change their names because they are using one fake driver’s license, but they change other things such as Social Security numbers.
Rivaling Katy’s ambitious activities, “Edward” filed 157 auto loan applications using various Social Security numbers and a fake driver’s license. “Reginald” was not as busy, but still applied for 83 auto loans using 30 different Social Security numbers.
“It shows how systematic it is and how often it is occurring every day,” McKenna says. “They’re hitting lenders and dealers any way they can.”
The Unlucky, Lucky Fraudster
“This one is kind of funny,” McKenna says, referring to a fraudster whose stated income wildly varies from one loan application to another. “We’ve seen this ‘borrower’ 120 times over the last year.”
On the first application, he claimed he earned $38,000 a year at McDonald’s. Then his annual income jumped to $90,000, then $140,000. It dropped to $33,000 at another job.
On one application, he stated he was an Auto Zone manager earning $239,000 annually.
Ironically, he once claimed to work for the Nevada Department of Employment.
The Stimulus Fraudster
This type of con artist originally had used fake identifications to obtain paycheck protection program money during the government economic stimulus program at the height of the COVID pandemic.
“These COVID scammers switched from stealing from the government to stealing from auto lenders,” McKenna says.
It’s unlikely that law enforcement and companies such as Point Predictive can completely defeat the scammers.
But the good guys are making inroads.
“The fraudsters are having to work harder,” McKenna says. “Lenders and dealers are getting smarter about thwarting fraud as they pay more attention to it. It’s like a cat-and-mouse game.”
