Powersports lenders are interested in sniffing out fraud earlier and are considering options in the form of machine learning such that the software can adapt to fraudulent behaviors, Powersports Finance has learned.
“There’s quite a bit of identity, synthetic identity, and income fraud in powersports,” said Frank McKenna, chief fraud strategist at PointPredictive. “But the lenders we are talking to believe the type of fraud is different enough that they want to create their own [program] for powersports.” The solutions company has a designated program for automotive lenders.
Powersports lenders have reported income and employment misrepresentation, dealer fraud, and phantom down payments as the most common kinds of fraud, McKenna said.
While fraud challenges both the automotive and powersports markets, the latter comes with extra obstacles that are leading some lenders to take a more technological approach.
“Powersports fraud is much more impactful to lenders once it happens, because it’s far easier to hide a motorcycle or a jet ski in a garage, and it’s so hard to recover,” McKenna said. “When there’s
fraud with a borrower or fraudster who has no intent to repay, they can make the vehicle go away.”