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InformedIQ auto finance study finds critical gaps in fraud detection, rising 'AI fatigue'

Wednesday, March 11, 2026 — 16:23:14 (UTC)

InformedIQ Study Of Auto Finance Professionals Reveals Critical Gaps in Fraud Detection and Rising “AI Fatigue”

While 75% of lenders report a surge in fraud, over half admit low confidence in current tools to stop AI-generated threats; findings highlight a shift from “futuristic promises” to a demand for tangible ROI

SAN FRANCISCO – March 11, 2026 - InformedIQ, a developer of AI-based software for income and employment verifications, announced today the completion of an industry-wide survey, presented to more than 2,500 auto finance professionals. The findings reveal that while fraud levels are reaching new heights, lenders are increasingly wary of generic AI solutions, citing "data hallucinations" and a lack of tangible results as primary concerns.

The online survey conducted in January, which gathered insights from director-level executives and above, highlights a growing "AI and fraud fatigue" across the industry. The sentiment among lenders has shifted from excitement over AI’s potential to a demand for proven, high-fidelity solutions that can tackle sophisticated modern threats.

“Lenders are no longer looking for futuristic promises; they are seeking immediate, tangible solutions to an escalating fraud crisis,” said Jessica Gonzalez, VP Customer Success and General Manager of Automotive at InformedIQ. “The data show a clear disconnect: fraud is becoming more sophisticated—powered by Generative AI—yet the majority of the industry is still relying on manual reviews that are slow, costly, and prone to error.”

The Financial and Operational Burden of Fraud

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

This crisis is only accelerating; Nearly two-thirds of respondents reported that identified fraud increased by 5% to 25% over the past year, while another 15.5% of respondents reported a surge of a quarter percent or greater.

Operationally, the reliance on manual verification is creating significant friction:

Costly Reviews: 58% of lenders estimate the cost of manually reviewing a single flagged loan file is between $50 and $100.

Funding Delays: Manual stipulation reviews cause funding delays of 16 to 30 minutes for over half of all respondents (55%).

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 tasks.

The AI Paradox: Vulnerability vs. Investment

Despite the push toward automation, confidence in current technology remains low. 55% of lenders describe themselves as only "Slightly Confident" in their ability to catch sophisticated counterfeit documents produced by Generative AI or deepfakes.

The survey also identified a major barrier to AI adoption: 52% of lenders cite "Data Hallucinations" (plausible but incorrect data generated by off-the-shelf LLMs) as their greatest concern. Furthermore, a massive blind spot remains, as 60% of organizations rarely check historical data to see if a document has been reused across different applications or lenders.

Compliance Pressures Mount

Heading into 2026, regulatory anxiety is high, with 39% of respondents anticipating tougher state-level enforcement and 33% citing increased scrutiny from federal agencies like the CFPB and FTC. Beyond auto lending, lenders also anticipate rising document rigor needs in mortgage/home equity (32%) and personal/unsecured loans (23%).

A Market Ready for Change

Looking ahead, 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 accuracy, compliance alignment, and resilience against fraudulent data.

About Informed.IQ

Informed uses AI/ML to instantly verify income, assets, residence, insurance, auto stipulations, credit stipulations and more, enabling real-time, reliable credit decisions without bias. Informed’s models are trained to process hundreds of document types and consumer-permissioned data sources, automating stipulation clearance for lenders. In 2023, Informed processed over 6 million consumer credit applications. The solution automates verifications with 99% accuracy in seconds with no humans-in-the-loop.

Informed’s Knowledge Graph and Data Consortium comprising more than 66 million records and 1.5 billion lending data points powers a Configurable, Verticalized AI Platform enabling scaling of portfolios of documents and data.

To learn more, visit informediq.com or follow Informed on LinkedIn.

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Source: Company press release.

Categories: Reports and research