Auto lending fraud has been rising for several years, but it remains hidden in credit losses, according to new research by a San Diego, Calif-based technology firm.

After 2016 auto lending originations soared to historic high levels, the downstream effects are now revealing themselves in higher fraud losses. It's estimated the annual value of auto loan originations that contain some element of misrepresentation may be as high as $6 billion in 2017, which is twice the 2016 estimates, PointPredictive reported in a white paper.

The white paper, based on an analysis of historical loan performance across several different portfolios, shows that auto lending fraud can be broken into three separate categories: known fraud that lenders have been able to identify, hidden fraud that ends up misclassified as early or first payment default, and systemic fraud by unscrupulous car dealers or representatives at car dealers. Each of these categories is a significant contributor to the increasing fraud losses that we are forecasting for the auto lending industry in 2017.