Steve Simon visited a local car dealer to ask about the trouble when buying a vehicle started with his deal. He has allowed the dealer to gain credibility. The delivery truck driver said, “I don’t like its interest rates, so I denied it, left, and went home.”
Unfortunately, this is not the end of the story, but the beginning of a nightmare. He told CBS New York that he received repeated notices of core inquiries a few days after visiting the dealer. If you get too many, these scores may hurt your score.
Worse, a few weeks later, he received a letter from Ally Bank indicating that he had been denied a joint lease with a woman named Michelle. "I don't know if there is no Michelle, no such person, if I can't get a car, I will definitely not sign someone else to buy a car together," Simon said.
Now, Simon is looking for the answer, but the dealer can't explain what's going on. But, it is obvious that Simon is the victim of identity theft—he is not the only one.
Identity theft related to car loans and rentals is far more than you would expect. In 2024, the Federal Trade Commission filed 60,189 claims. This is an increase of 16% compared to the previous year.
This year's situation is not good either. FTC data shows that 21,446 such automatic rental or loan identity theft reports were filed in the first quarter of 2025 alone, an increase of 71% over the same period last year. If this trend continues, 2025 will see record numbers, according to CBS New York.
Synthetic identities combine real people’s information (such as their social security number or date of birth) with false information, which is an increasing number of problems due to generated AI. The false identity held $3.3 billion in auto loans, bank credit cards, retail credit cards and unsecured personal loans late last year, according to the Transunion report.
The kind of identity theft that Simon experienced could have a destructive impact on the victim’s credit score, borrowing ability, and financial well-being.
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Lucas Gutterman, a consumer advocate for the American Public Interest Research Group, said one of the highlights of Simon's situation was that he received a letter of denial on the loan.
He told CBS New York that he told CBS New York: “If someone who has been accepted and who is a criminal can use that credit limit, that could cause serious damage by affecting the credit score or simply affecting the debts that the person owes.”
Still, duplicate credit queries are a hassle and have real-world financial consequences. Simon explained that the incident was "destroying my credit score."
To avoid becoming a victim of automatic loan identity theft, it is important to ensure that all identified information is secure.
Do not share your personal details such as your Social Security number on the Internet or on the phone. This could be a fraudster pretending to be your bank or government agency. If something seems like (even at a dealer) doesn't offer your social security number because you don't want it to abuse credit you don't want, like Simon has experienced it.
He was notified when checking his credit. For everyone, it is a good idea to sign up for such notifications so they will immediately know if there is a problem.
You should also check your credit report regularly. If you suspect someone might be trying to steal your identity, you can freeze your credit in your credit report. You must contact each of the three credit bureaus (Experian, Transunion and Equifax).
By taking these steps, consumers can reduce their chances of becoming victims even with their interest in automatic loan fraud – they can avoid the hassle and potential damage that accompany them.
Gutterman and other consumer advocates also recommend reporting any suspicious fraud to the Federal Trade Commission and local police so that scams can be properly documented and investigated and awareness-raising to help others become victims as well.
This article provides information only and should not be construed as advice. It is without any warranty of any kind.