InformedIQ, a developer of AI-based software for income and employment verifications, has released the results 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 by InformedIQ, 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 of 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 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.
Despite the push toward automation, confidence in current technology remains low. Roughly 55% of lenders describe themselves as only “Slightly Confident” in their ability to catch sophisticated counterfeit documents produced by Generative AI or deepfakes.
The InformedIQ 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.
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%).
Looking ahead, InformedIQ learned that 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.