Zombie Debt Reassignment: A Scary New Reality for Dealerships and Lenders

Zombies: They’re scary, they’re dangerous, they’re…fictitious?

Or are they? 

Unfortunately, in the world of lending, zombies have moved beyond fiction to reality. Now the term has attached itself to the fraud landscape, creating a truly harrowing experience for consumers. 

Zombie debt is not a new phenomenon. But it’s as terrifying as it sounds. Essentially, it’s bad debt that has met the statute of limitations for staying on a consumer’s record and finally fallen off–only to be “reawakened” and exploited by fraudsters. In the past, fraudsters have bought this kind of debt from debt collection firms to bully consumers into settling for smaller amounts by deceiving them into believing the debt still impacts their credit. 

Nowadays, however, fraudsters are leveraging an innovative way to use consumer debt–through zombie debt reassignment—and it’s affecting tradelines. 

Our in-house fraud strategist, Frank McKenna, an industry acclaimed fraud expert, published a piece about this latest trend in a recent issue of Auto Remarketing

In his article, Frank covers:

  • What zombie debt reassignment is
  • How it impacts tradelines
  • How fraudsters use it to artificially boost credit scores
  • What auto lenders can do to identify zombie tradelines

If you’re a dealership or in the automotive world, zombie debt reassignment will likely cross paths with you at some point. Read the complete article here on pages 88-89 to get informed.

Learn more about Point Predictive’s fraud, income and employment verification solutions for dealerships and lenders–including banks, credit unions and fintechs.

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