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American Cycle Finance spots uptick in bogus apps

American Cycle Finance has seen fraud increase 15% to 20% in the past year, President Ben Donnarumma told Powersports Finance. 

“We’ve seen a lot more fraudulent applications,” Donnarumma said. “People will come to a dealer, and they’ll come in with fraudulent paystubs and fraudulent bank statements, and they’ll do it two or three at a time.” 

For example, a fraudster will come to a dealership with an accomplice and tell the sales manager that they are both looking for motorcycles. “They kind of put it to the salesman that this is going to be a two-for-one, and then you find out the paystubs are bad and the bank statements are bad,” Donnarumma added.  

For More Read: American Cycle Finance targets faster underwriting with in-house software

Though the subprime lender does not track fraud metrics monthly, it has seen increased activity from scammers. While ACF could not identify a specific type of fraud on the rise, it typically sees first-party and third-party fraud, with the exception of synthetic fraud, which happens more in the prime credit tier.

American Cycle Finance works with multiple vendors to detect fraud early, in addition to manually reviewing applications to spot red flags within the first few minutes. 

“We had one last week in which everything about the deal was fraud,” Donnarumma explained. “We caught it, and we didn’t let it roll. But one of the things that gave it away was that the driver’s license had a height on it that was wrong. So, the height of the person was different than what was on the driver’s license, and it was a significant difference.” 

The Marlborough, Mass-based lender works with 400 dealerships. 

As Associate Editor of Powersports Finance, Matt Wood reports on the latest developments and trends of the powersports finance world, from innovation to new partnerships. He's also a movie/TV show buff and is willing to argue about Lost anytime. Former bylines include Scout Media and CinemaBlend.

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