PREVENTING PORTFOLIO FRAUD EXPERT PANEL JUNE 1, 2018
Founded in 1996, Dallas-based DIMONT is a leading provider of insurance claims and collateral loss mitigation services to the residential mortgage and auto lending industries nationwide. Since 2010, DIMONT has recovered over $2 billion in insurance claims proceeds for its clients. DIMONT’s solutions provide value to the automotive lending community by dramatically reducing default-related losses. Our solutions include: • Auto claims processing • Insurance monitoring • Product cancellation • GAP claim processing and filing Our data-driven insurance monitoring solution utilizes technology to consolidate insurance information on the collateral within the lender portfolio, confirming collateral protection in the event of a repossession claim. Daily automated feeds provide the lender all relevant insurance changes, enabling proactive communication with borrowers on insurance status.
• Leading provider of GPS Solutions and Installation services. • In business for more than 25 years. • Products help connect and protect mobile assets • Industries: automotive, powersports, and fleet. • Serving dealers, finance companies, fleet transportation providers and consumers. • High-quality, reliable products, and Installations • Compliance awareness • Unmatched customer support.
• Established In 1986. • 100% Focused On Vehicle History Data. • CARFAX Is A Trusted And Recognizable Name Brand. • More Than 20 Billion Vehicle History Records From Over 100,000 Sources In The U.S. & Canada. • Loads 5 Million New Records, Daily. • Used Daily By Thousands Of Auto Lenders, Credit Union and Insurance Companies. • Covers areas of fraud such as Title Washing, VIN Cloning, Odometer Rollback and Collateral Location.
First technology company to provide complete transparency of a pre- owned vehicle identified by the 17-digit VIN. A technology platform to identify the correct equipment configuration and value of a pre-owned automobile. Provides a solution of recovery for auto finance companies for charged-off vehicles by utilizing data analytics, OEM build data, industry expertise, a leading edge learning technology and a service oriented team.
DIMONT’s estimate of fraud’s size $6 billion in auto fraud in 2017 and growing due to – An increase in overall lending volumes and auto sales over the last year – An increase in lending volumes to higher risk, non-prime borrowers – An increase in fraud misrepresentations linked to early payment default as some dealers try to push bad loans to lenders • We found very little visibility into insurance monitoring and tracking, prompting us to develop a technologically sound, low cost, data-driven solution that would help drive down fraudulent activity for lenders
The Size of Fraud PassTime Devices 99.6% 4-5% 1-2% 2M+ Tamper Rate: CU Tamper Rate: FinCo Devices deployed Device reliability Most common false Installation vehicle verification fraud vehicle items: 40% $400-$500 • Odometer mileage incorrect (understated by 3000-4000 miles) False vehicle info Avg. falsely inflated vehicle • Check Engine light validated upon inspection value • Navigation not validated • DVD/Rear Entertainment not indicated Case Study Recourse companies identified over 50% of their tampers occurred at the end of the Dealer Recourse period at the Dealership location
estimate of fraud’s size • Fraud Is An Ongoing Problem. Over 750,000* Vehicles Are Stolen Each Year Creating Opportunities For Fraudsters To Take Advantage Of Consumer Situations. • Many Of These Vehicles Are Sent To Chop Shops Or Sent Overseas. Others Have Their VIN Cloned Which Is An Even More Lucrative Way For Criminals To Repurpose And Resell The Vehicle. • More Than 2.5 Million Salvaged Vehicles Are Sold To Unsuspecting Buyers Annually.** • There Are Currently Over 800,000 Vehicles On The Road With Washed Titles. • Estimated That 5 Million Total Loss And/ Or Salvaged Cars Are Sold Annually.** • 1.3 Million Vehicles On The Road With An Odometer Rollback.** *NHTSA ** CARFAX
estimate of fraud’s size Annually, auto finance companies charge-off an incremental $1.0 Billion dollars due to collateral misrepresentations. This charged-off amount directly impacts the consumers deficiency balance. 31% of all vehicles funded, and charged-off, are misrepresented to the auto finance company by an average of $1,100.00 per vehicle. Nearly, 1.0 million of the 3.0 million vehicles charged-off annually fall into this category.
How DIMONT defines fraud • There are many variations of fraud that impact loan performance • Income * Employment * Identity theft * Straw borrower * Dealer * Collateral * Excessive dealer markups * Odometer * Yo yo * Document * Title * Insurance • Broadly speaking, all fraud involves intentional deception for financial or personal gain • DIMONT’s insurance monitoring solution helps mitigate insurance fraud by identifying in real-time any updates/changes to customer insurance status, i.e. customer claims to be insured but drops the policy immediately after purchasing the vehicle • Our customers are utilizing this data to develop scoring models, build reporting, identify customer behavior, and build collection strategies
How we see fraud 1. Dealer Fraud: Vehicle information falsely stated such a. as equipment, odometer mileage, VIN and vehicle condition. Power Booking. Sure-Pass Vehicle Inspection Sheet CHECK ENGINE LIGHT for Sure Trac Use Consumer Fraud: 2. Only OFF - CHECK ENGINE LIGHT SUNROOF for Sure Trac Use Only Borrower information falsely provided a. NO - Sunroof LEATHER INTERIOR for Sure Trac Use such as residence, work address, Only Leather GPS NAVIGATION for Sure Trac Use Only purpose/use of vehicle, possession of NO - GPS/NAVIGATION TOWING PACKAGE for Sure Trac Use Only vehicle (Straw purchase) TOW HITCH REAR DVD ENTERTAINMENT for Sure Trac Use Only NO - REAR DVD ENTERTAINMENT SYSTEM
defines fraud (collateral) How In The Context Of Vehicle History: Fraud = Compromised Vehicle History + Deception There Are 4 Core Areas Of Collateral Fraud • Title Washing - The Process By Which A Vehicle's Title Is Altered To Conceal Information That Would Normally Be Included. By Removing Salvage Or Flood Brands, Scammers Are Able To Give Dangerous Vehicles, Clean Titles. This Illegal Scam Places Unsuspecting Drivers Into Vehicles That Could Be Both Mechanically And Structurally Unsafe. • VIN Cloning – A VIN From A Legally Registered Car Is Utilized In Order To Hide The Identity Of A Stolen Or Salvaged Vehicle. • Odometer Rollback - The Process Of Falsifying A Vehicles Recorded Mileage. Fairly Easy To Accomplish Regardless Of Whether The Vehicle Possesses A Mechanical Or Digital Odometer. Consumers Lose As Much As $4 Billion A Year Due To Odometer Fraud With The Average Odometer Rollback Being 30,000 Miles. • Collateral Location – Vehicle Is Represented As Being In The U.S. But Is Not.
How defines fraud The intentional misrepresentation of collateral at origination in an effort to manipulate the deal structure and deceive the entity funding the vehicle for the benefit of the selling party. Vehicle is “Power - Booked” and the maximum amount available to finance (LTV) Vehicle is not “Power - Booked” and the maximum amount to finance (LTV) NADA Clean Trade - $18,675 x 120% (Lender Advance) = $ 22,410 NADA Clean Trade - $ 15,900 x 120% (Lender Advance) = $ 19,080 11/8/2016 11/8/2016 N A D A U se d C a rs/T ru c ks N A D A U se d C a rs/T ru c ks V e h icle In fo rm a tio n V e h icle In fo rm a tio n V e h icle : 2 0 1 4 C h e v ro le t C a m a ro C o u p e 2 D L T 3 .6 L V 6 A u to V e h icle : 2 0 1 4 C h e v ro le t C a m a ro C o u p e 2 D L T 3 .6 L V 6 A u to R e g io n : C e n tra l R e g io n : C e n tra l P e rio d : N o v e m b e r 8 , 2 0 1 6 P e rio d : N o v e m b e r 8 , 2 0 1 6 V IN : 2 G 1 F B 1 E 3 X E 9 1 71 5 2 1 V IN : 2 G 1 F B 1 E 3 X E 9 1 71 5 2 1 M ile a g e : 4 2 ,5 0 0 M ile a g e : 4 2 ,5 0 0 N A D A U s e d C a rs /T ru ck s V a lu e s N A D A U s e d C a rs /T ru ck s V a lu e s T ra d e - In B a s e M ile a g e A d j. O p tio n A d j. A d ju s te d V a lu e $16,325 Rough $13,550 N/A $2,775 T ra d e - In B a s e M ile a g e A d j. O p tio n A d j. A d ju s te d V a lu e $17,625 Average $14,850 N/A $2,775 $13,550 Rough $13,550 N/A N/A $18,675 Clean $15,900 N/A $2,775 $14,850 Average $14,850 N/A N/A $15,900 Clean $15,900 N/A N/A $17,100 Clean Loan $14,325 N/A $2,775 $21,075 Clean Retail $17,950 N/A $3,125 $14,325 Clean Loan $14,325 N/A N/A S e le cte d O p tio n s $17,950 Clean Retail $17,950 N/A N/A T ra d e - In /L o a n R e ta il Navigation System $575 $650 Power Sunroof $575 $650 RS Package $1,250 $1,400 Boston Acoustics Stereo $375 $425 © ©
Recommend
More recommend
