Business Analytics & Data Management
2 minute read
Jun 12, 2018
Written by: Shawn Sweeney
The Spinnaker Consulting Group team of experts joined auto finance leaders and dealer principals from around the country last week for the 22nd Annual Non-Prime Auto Financing Conference, featuring a deep dive into the key industry issue of auto finance fraud. The National Automotive Finance Association’s annual event creates the opportunity to learn about the challenges of non-prime financing including fraud, regulatory compliance, risk management, and more.
Spinnaker Directors Joel Kennedy and Jeff Marshall were Spinnaker’s boots on the ground, talking shop in our booth as well as discussing trends and challenges during the sessions and throughout the conference. Joel Kennedy, who is also on the NAF Association’s Board of Directors, further contributed his industry expertise as a session presenter and moderator to kick off Fraud Friday, an entire morning of discussions devoted to auto finance fraud.
If you were unable to attend, here are a few highlights related to auto finance fraud:
- Auto finance fraud continues to be a major focus and challenge for the industry. In fact, incidents of auto finance fraud are up 20 percent year over year and are costing our industry an estimated $6 billion a year.
- Income and employment fraud are still the biggest sources of fraud and represent 47 percent of all observed fraud.
- Dealer risk – or fraud introduced by dealers – represents 25 percent of all observed fraud.
- According to TransUnion, synthetic ID fraud exceeded $500MM last year, but does not represent a major source of fraud for non-prime lenders.
- Industry peers must work together. The industry’s ability to fight fraud will be greatly enhanced when lenders are willing to share best practices and information without sharing critical, proprietary information.
- Lenders can proactively protect themselves by completing comprehensive risk assessments. Completing a risk assessment is not difficult, and there are many experts who can help you complete the assessment as needed. A good risk assessment ensures lenders are operating with “eyes wide open.”
- Leveraging the right tools can help. Point Predictive has initiated a fraud consortium scoring model, utilizing a data set of 55 million applications submitted from non-prime lenders that has a 50 percent detection rate in identifying fraud and misrepresentation related to the riskiest 10 percent of loan applications.
If you want to learn more about these takeaways or you’re interested in a detailed recap from Fraud Friday, just let us know. We also invite you to check out Joel’s article “The Taxonomy of Fraud in Indirect Auto” on page 8 of the new May/June 2018 issue of Non-Prime Times.
Got questions about trends, insights, and challenges related to Spinnaker’s areas of expertise? In this regular blog, we tap into our Spinnaker team of experts and do what we do best: Roll up our sleeves to find you the answers you need. In this installment of “Ask Spinnaker,” we’re taking a close look at the three big advantages of working with a smaller consulting firm like Spinnaker.
Executive Leadership Coaching 3 minute read
Late last month, I had the pleasure of attending and facilitating a couple of on-demand panels for the American Banking Association’s (ABA’s) first-ever Risk and Compliance Virtual Conference.
Customer Channels & Operations Management, Business Analytics & Data Management, Risk Management & Regulatory Compliance 4 minute read
In late March, several Spinnaker team members participated in ABA Risk 2021, both as panelists and attendees. This premier risk conference from the American Bankers Association combines enterprise risk management, insurance risk management and risk quantification, while delivering expert takes on current and emerging threats along with best practices.
Customer Channels & Operations Management, Business Analytics & Data Management, Risk Management & Regulatory Compliance 3 minute read
Like how we think? Subscribe to have our articles delivered direct to your inbox each month.
Headquarters: 8000 Franklin Farms Drive, Suite 100, Richmond, VA 23229
©2021 Spinnaker Consulting Group. All rights reserved.