PointPredictive understands criminals looking to orchestrate auto finance scams aren’t sitting idle.
On Tuesday, PointPredictive announced the launch of a new patent pending solution called Synthetic ID Alert. The solution is a complement to the company’s comprehensive application fraud scoring solution Auto Fraud Manager.
Synthetic ID Alert can help auto finance companies stop synthetic identity fraud by producing alerts on applications that exhibit patterns consistent with synthetic ID fraud. This sophisticated machine learning AI is quickly and easily installed within a lender’s technology system to be used in real-time application review.
“Auto lenders participating in our consortium meetings have identified that one of their top three issues this year is solving synthetic identity fraud. Our analysis shows that synthetic identity fraud accounts for 15 to 20 percent of fraud and misrepresentation losses across the industry. This equates to more than $1 billion in synthetic identity originations this year,” said Eric Werab, vice president of fraud and product strategy at PointPredictive.
“Synthetic identity thieves have figured out that credit scores and reports can be manipulated through schemes such as trade line piggybacking, which can artificially inflate their credit scores.”
Synthetic ID Alert scores applications based on patterns of fraud that fraud data scientists have identified in millions of historical automotive applications. This solution understands the logistics of social security number issuance, the interconnections between each of the pieces of information supplied on the application by the dealers and borrowers, and how all of these compare to proprietary and statistical norms accumulated from historical applications, dealer performance and fraud ring patterns.
If the solution determines that an application has a high likelihood of synthetic identity, a score and actionable reason codes are provided to the finance company so they can take immediate steps to prevent funding the fraudulent installment contract.
With this solution, PointPredictive projected that finance companies will need to act on less than 0.5 percent of their total application population to stop a significant portion of their synthetic ID fraud.
“Our proprietary machine learning algorithms are built on over 40 million historic applications and are capable of instantly identifying a pattern of synthetic identity. We wanted to create a simple, easy to install and use solution for lenders to solve a specific need,” PointPredictive chief executive officer Tim Grace said.
“With Synthetic ID Alert, we think we can help lenders identify a significant portion of their synthetic identity fraud applications before they approve the loans that will lead to losses,” Grace continued.
The solution is available immediately to finance companies as an application that can be installed in less than a day on existing technology systems. We also plan to offer this installation to our partner loan origination and solution providers.
To receive more information about Synthetic ID Alert, or to request the firm’s latest white paper entitled, “How Hidden Fraud & Misrepresentation are Contributing to the Rise in Default Rates,” send a request through or directly to [email protected]