FlexPath DXP co-founder and CEO Tarry Shebesta is not necessarily trying to freak out the auto-finance industry.

But he did try to alert dealers, lenders and other service providers about a critical fraud pattern he spotted that’s targeting auto, powersports, and RV credit prequalification web apps.

“In a recent real-world incident, hundreds of prequal submissions were completed in a matter of minutes, each using completely different names, addresses, and phone numbers,” Shebesta said in an industry message. “Every one of these fraudulent submissions successfully triggered a credit bureau inquiry.

“The behavior strongly suggests bot or AI-driven identity validation attacks, where bad actors test real-looking data to confirm who qualifies for credit — paving the way for synthetic identity fraud, money laundering, and stolen data monetization,” Shebesta continued.

To reinforce his urgency about the situation, Shebesta pinpointed five other potential pitfalls, including:

—Consumers may have their credit pulled without their consent

—Dealers and lenders risk funding fraud or facing legal exposure

—Platforms are unintentionally enabling identity validation for criminals

—No traditional CAPTCHA, rate-limiting, or duplicate suppression tools caught this

—Dealers and lenders are being charged for fraudulent credit pulls

“This is not theoretical. It’s already happening, and most prequal systems are completely unaware it’s occurring on their own platforms,” Shebesta said.

So, what should dealerships and finance companies do now? Shebesta offered three suggestions for any organization offering an online prequalification portal:

  1. Review submission logs for rapid-fire, unique submissions
  2. Audit credit bureau activity for unexplained spikes or inquiry complaints
  3. Evaluate whether identity is verified before credit is pulled because most legacy systems do not)

Shebesta closed by noting that FlexPath DXP built VeriQual in a way that can verify consumer identity in real-time before any credit pull occurs

“While the focus of this PSA is to alert the industry to the threat, we are happy to provide support to any platform, dealer group, lender, or regulator seeking to address this issue responsibly,” Shebesta said. “We’re committed to helping protect the industry from fraud and consumer harm.”

To learn more, visit www.FlexPathDXP.com.