InformedIQ Study Finds Increased Auto Finance Scams and AI Fatigue

InformedIQa developer of AI-based software for income and employment verifications, has released the results of an industry-wide survey available to more than 2,500 automotive finance professionals. The findings reveal that: fake Levels are reaching new highs, with lenders increasingly wary of mainstream AI solutions, citing data hallucinations and lack of tangible results as primary concerns.

The online survey, conducted by InformedIQ in January and seeking input from director-level executives and above, highlights the growing “AI and fraud fatigue” in the industry. Sentiment among lenders has shifted from excitement about the potential of AI to demand for proven, high-quality solutions that can combat complex modern threats.

“Lenders are no longer looking for futuristic promises; they are looking for immediate, concrete solutions to the growing fraud crisis.” in question Jessica GonzálezVice president of customer success and general manager of automotive at InformedIQ. “The data shows a clear disconnect: Fraud is becoming more sophisticated, powered by Generative AI, but the majority of the industry still relies on slow, costly and error-prone manual reviews.”

The survey underlines the staggering cost of modern fraud. More than half of lenders attribute 10% to 19% of their total annual loan losses or charge-offs to document-based fraud, such as fake pay stubs and identity manipulation.

This crisis is only accelerating; Nearly two-thirds of survey respondents said detected fraud had increased by 5% to 25% over the past year, while another 15.5% reported an increase of a quarter of a percent or more.

Operationally, relying on manual verification creates serious friction:

Expensive reviews: 58% of lenders estimate that the cost of manually reviewing a single flagged credit file is between $50 and $100.

Funding delays: Manual term reviews cause funding delays of 16 to 30 minutes for more than half (55%) of all respondents.

Untapped potential: If lenders could achieve 99% confidence in automated verification, 38% believe they could reallocate more than half of their current underwriting staff to higher value roles.

Despite the push for automation, trust in existing technology remains low. Approximately 55% of lenders describe themselves as only “Somewhat Confident” in their ability to catch complex fake documents produced by Generative AI, or deepfakes.

The InformedIQ survey also identified a major barrier to AI adoption: 52% of lenders cite data hallucinations (plausible but inaccurate data generated by off-the-shelf LLMs) as their top concern. What’s more, a major blind spot remains as 60% of organizations rarely check historical data to see if a document has been reused across different applications or lenders.

Regulatory concerns are high as we head into 2026; 39% of respondents predict stricter enforcement at the state level, and 33% say inspections from federal agencies such as the CFPB and FTC will increase. Beyond auto loans, lenders anticipate increased documentary diligence needs for mortgages/home equity loans (32%) and personal/unsecured loans (23%).

Going forward, InformedIQ learned that lenders plan to prioritize AI investments in credit risk modeling (43%) and fraud detection and prevention (24%). The message is clear: The industry is ready for AI-driven modernization; but only from partners who can demonstrate integrity, compliance compliance, and resilience against fraudulent data.