Steve Simon’s trouble began when he visited a local car dealer to inquire about buying a vehicle, and the transaction didn’t work out. He had given the dealer permission to run his credit. “I didn’t like the interest rate on it, so I denied it, left, went home,” said the delivery truck driver.
Unfortunately, this wasn’t the end of the story, but the beginning of a nightmare. He told CBS New York that in the days following his visit to the dealer, he received repeated notices of hard inquiries being placed on his credit. Those can damage your score if you get too many.
Worse still, weeks later, he received a letter from Ally Bank indicating he’d been denied the lease he’d co-applied for at the dealer with a woman named Michelle. “I don’t know no Michelle, no person like that, and if I’m not able to get a vehicle, I damn sure not gonna co-sign for someone else to get a vehicle,” Simon said.
Now, Simon is looking for answers, but the dealership can’t explain what happened. What is clear, though, is that Simon is a victim of identity theft — and he’s not the only one.
Identity theft related to auto loans and leases occurs far more often than you might expect. In 2024, the Federal Trade Commission fielded 60,189 claims. This was a 16% increase compared with the prior year.
Things aren’t looking any better this year either. FTC data reveals 21,446 of such auto lease or loan identity theft reports were filed in the first quarter of 2025 alone, up a whopping 71% from the same time last year. If this trend continues, 2025 will see a record number, according to CBS New York.
Synthetic identities, which combine a real person’s information like their Social Security number or date of birth with false information, are a growing problem due to generative AI. At the end of last year, $3.3 billion in auto loans, bank credit cards, retail credit cards and unsecured personal loans were held by such fake identities, according to a TransUnion report.
The kind of identity theft that Simon experienced can have damaging effects on a victim’s credit score, ability to borrow, and financial well-being.
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Lucas Gutterman, a consumer advocate at the U.S. Public Interest Research Group, said that the one bright spot in Simon’s situation is that he got a denial letter on the loan.
“If it had been accepted and someone who is a criminal had gotten access to that line of credit, that could cause some serious damage by affecting the credit score or just affecting the debts that this person owed,” he told CBS New York.
Still, the repeated credit inquiries are a hassle — and one with real-world financial consequences. Simon explained the incident was “ruining my credit score.”
To avoid becoming a victim of auto loan identity theft, it’s important to keep all your identifying information safe.
Don’t share personal details like your Social Security number on the internet or on the phone. It could be a scammer pretending to be your bank or a government agency. If something seems off — even at a dealership — don’t provide your Social Security number, as you don’t want it misused to apply for credit you don’t want, like Simon experienced.
Simon received notifications when his credit was checked. It’s a good idea for everyone to sign up for these kinds of notifications so they will know right away if something is wrong.
You should also regularly review your credit reports. If you suspect someone may be trying to steal your identity, you can place a credit freeze on your credit reports. You would have to contact each of the three credit bureaus — Experian, TransUnion, and Equifax — to do this.
By taking these steps, consumers can reduce the chance of becoming a victim even with auto loan fraud on the rise — and they can avoid the hassle and potential damage to their credit that goes along with it.
Gutterman, and other consumer advocates, also suggest reporting any suspected fraud both to the Federal Trade Commission and local police so the scam can be properly documented and investigated — and to raise awareness to potentially help others from becoming victims as well.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
