Welcome to the Daily 5 report for Wednesday, Sept. 24.
Hardly a week goes by here at Automotive News without us publishing a story about an auto retail scam. This story by Eric Freedman focuses on a "credit bust out" scheme that got caught up in an investigation by a Florida law enforcement task force.
Finance and insurance managers around the U.S. should pay close attention to this one.
As Freedman reports, the suspects in Florida lied on loan application forms, falsely claiming large salaries to purchase multiple expensive vehicles in short periods. Under the scheme, the liens are then "washed," and the vehicles are sold out of state or out of the country.
"Such activity is consistent with what is known in the industry as a 'credit bust out,' which is an emerging criminal trend within the auto finance industry," one of the the criminal complaints said. "During a credit bust out, an individual typically purchases numerous vehicles during an abbreviated period of time before the vehicle purchases reflect on their credit report."
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One of the cases listed these vehicles as fraudulently purchased: a 2022 Chevrolet Corvette ($71,990), 2025 Lexus GX 550 ($73,423), 2025 Toyota 4Runner ($45,770), 2024 Ford Ranger Raptor ($55,720), 2023 Cadillac Escalade ($79,295) and 2022 GMC Yukon Denali ($58,895).
"The wrongdoers are exploiting loopholes," one of the case detectives told Automotive News. "Because of our arrests and investigation, these are coming to light."
Ripped-off dealerships have been able to recover some, but not all, of their vehicles, Freedman wrote.
It begs the question of whether current best practices by a competent F&I manager are capable of detecting such a scam in real time. And it raises the concern that a dealership might be too quick to approve a transaction before full due diligence is completed on a credit application.
In other news, NHTSA said it opened a preliminary evaluation into 17,198 Rivian electric delivery vans over seat belt concerns, Reuters reported. The probe focuses on the driver's front outboard seat belt anchorage system.
Also from NHTSA: Ford Motor Co. is recalling 115,539 pickups in the U.S. over a defect that could cause the steering column's upper shaft to detach, according to Reuters. It is a record 112th recall for Ford so far in 2025.
That's it for now. If you want to see this story in your browser, click here.
— Philip Nussel, online editor
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