TransUnion described how quickly technology is being leveraged dishonestly, putting finance companies into a challenging place of chasing for someone who probably never even existed.

Pat Phelan indicated individuals who are looking to commit sophisticated credit fraud are quickly moving their targets from goods that might cost less than $200 to some of the most expensive vehicles in a dealer’s inventory — and leaving finance companies on the hook for the amount attached to the contract and no collateral.

The senior vice president in TransUnion’s innovative solutions group explained to SubPrime Auto Finance News the concept of synthetic identities.

“What they’ve now discovered is they can take elements of genuine identities, usually around a credit breach or an identity breach, and they can build fake identities and take that to a dealer and drive out with a very high-end automobile. The only people who really suffer is the lender because the car is gone,” Phelan said.

“It wasn’t someone else’s identity. It was a synthetic identity, created for that purpose of committing fraud,” he continued.

Phelan noted that what’s happening now is similar to what’s also known as loan stacking. An individual first might commit fraud through a cellular phone contract, move into credit cards and small bank loans and then on to what he says is the “big-ticket item,” a car.

“It’s really starting to accelerate at the moment,” Phelan said about synthetic fraud happening in the auto finance space. He estimated the activity has jumped by 15 percent during the past 24 months.

Phelan added these crimes happen over a period of time.

“These aren’t done on a Monday to cash out of a Friday,” he said. “There is intense behavioral stuff here.”

In response, TransUnion on Wednesday unveiled IDVisionSM, a suite of solutions providing finance companies with bureau officials think is a holistic approach to fraud and identity management. IDVision is designed to help companies stop sophisticated and evolving fraud while also protecting and restoring their confidence in conducting business.

TransUnion’s IDVision suite is comprised of multiple solutions, addressing a variety of critical issues in the fraud and identity management space. For instance, the Synthetic Fraud Model addresses the key question of whether an identity has been fabricated or manipulated. Digital Verification and Authentication solutions ensure consumers are who they say they are by examining hundreds of digital signals captured during an online or mobile transaction.

IDVision also includes the recently launched Fraud Prevention Exchange, a first to market solution designed to help both established finance companies such as credit card issuers and emerging FinTech lenders combat online first party fraud by monitoring application velocity and reported fraud real-time.

“Fraud today does not just impact businesses’ bottom lines with current customers, it also causes losses related to lost opportunities when frustrated customers walk away, and also from back office expenses incurred to manually review fraud,” Phelan said in a news release.

 “The fact that businesses can receive all of the fraud and identity management tools necessary to prevent losses in one suite of solutions sets IDVision apart from others in this growing industry,” he added.

An example of the power of IDVision recently occurred when TransUnion said correctly identified 95 percent of fraud cases for an auto finance company. At an estimated average of $22,000 per loan with no recovery, averted losses would save almost $2 million for every 100 cases.  Losses such as this are due to synthetic fraud and fraudulent loan stacking — recent fraud and identity threats addressed by the IDVision suite.

“We’ve seen this behavior is causing major problems, especially in subprime and near-prime where we see some purchaser got a loan and then within 15 days are more than two and a half times more likely to default on payment,” Phelan told SubPrime Auto Finance News earlier this week.

“A couple of months ago, a Russian crime ring was targeting the U.S. lending and had actually hired perfect English speakers,” he continued. “So if there any chance of the loan being flagged, the English speaker would get on the phone and they would be paid bonuses based on the loans given.

“A really big industry has sprung up around this, and it all starts with this compromise of the identity. Once you have that identity started, it’s quite difficult to detect it,” Phelan went on to say.

That’s why TransUnion is so high on its latest tool. Credit bureau officials insisted IDVision brings together robust data assets with advanced analytics technology that links, interprets and analyzes information to discover anomalies and patterns of risk. Finance companies receive actionable alerts and instantly delivered scores so they can make timely decisions.

As a result, TransUnion emphasized finance companies across various industries can identify more good consumers to enable secure, confident and convenient authentication.  Additionally, they can detect more fraud patterns at origination, during transactions and by monitoring portfolios — allowing them to improve the customer experience.

“As fraud evolves and becomes more sophisticated, the legacy systems many businesses have in place are not sufficient to detect today’s fraudsters,” Chris Cartwright, president of TransUnion’s U.S. Information Services, said in a news release.

“We developed IDVision to provide greater certainty now, and as fraud evolves — while still meeting the expectations of speed and uninterrupted consumer experience our customers need,” Cartwright continued. “The IDVision suite works to learn and predict patterns of risk to help customers more strategically anticipate tomorrow’s threats by staying ahead of fraudsters today.”

TransUnion recently purchased Phelan’s company; a European firm that specialized in synthetic identity investigation. The acquisition turned out to be a crucial part of what TransUnion is now offering.

“We’ve put it all together for the first time,” he said. “I’ve seen lots of pieces of this. There are lots of companies that do online fraud. I’ve seen some companies that do synthetic fraud and others that do loan stacking. But I’ve seen no company that has all of this in one simple API.”