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AI is driving a new wave of motor fraud, says Dave Rossi, Managing Director at National Hunter, a counter-fraud not for profit membership body.
Motor fraud has been evolving fast. AI has acted as an accelerant, adding the ease, accuracy and volume for motor fraud to spread like wildfire. Criminals are operating faster, at a greater scale, and with increasing sophistication, from AI-generated identities used in financial applications and compensation scams to ghost vehicles, fake insurance websites, and manipulated claims evidence.
The digital processes designed to improve speed and convenience for genuine customers are now being exploited at scale by criminals. This, combined with the increasing popularity of remote purchasing and growing financial pressures and concerns, is creating an environment where fraudulent activity can flourish. The challenge for those in the motor industry now is not simply detecting suspicious applications in isolation, says Dave Rossi, Managing Director at National Hunter, but rather identifying coordinated patterns before losses become significant.
AI-enabled deception
In 2025, AI scams drove UK reports of fraud to 444,000 cases, according to Cifas, with the technology enabling large-scale deception on “industrialised” levels. One of the perhaps most costly and growing AI deceptions facing the motor industry is ghost fraud, where vehicles are financed, purchased or insured despite never existing. In these cases, criminals are exploiting high transaction values, rapid decisioning and, in some cases, trusted dealer relationships. AI is used to create convincing vehicle listings, falsified documentation and cloned dealership communications at scale.
Covid accelerated ghost fraud, with the shift towards remote purchasing making it easier for criminals to present vehicles that are not real. When consumers realise they have become a victim of fraud, it is often too late. Without a physical asset to recover, losses can be difficult to recoup, leaving lenders and consumers often out of pocket. Automation is allowing criminal groups to target multiple lenders at the same time across multiple consumer victims. Viewing each crime in isolation may result in it being identified as an unfortunate one-off occurrence. But, viewed together, patterns emerge, from dealerships being impersonated, to individuals’ details (such as name, address and contact number) and car details (such as make, model and number plate) appearing repeatedly in applications.
The convincing cons facing car insurance
Alongside ghost fraud, there has also been a growing number of fraudulent activities targeting car insurance this year. With AI helping criminals become even better at targeting the vulnerable, we are seeing ghost brokers targeting young drivers and romance scammers increasingly persuading victims to submit false insurance claims.
The FCA recently shared a warning to young drivers regarding fake car insurance policies sold on social media. According to research, half (49 per cent) of young drivers have bought insurance through social media or messaging apps. In these cases, ghost brokers pose as legitimate insurance sellers offering young drivers cheap rates. In these cases, they are either entirely fake, invalid as the criminal falsifies details, or are cancelled shortly after purchase, leaving victims unknowingly uninsured. Again, in these cases AI is helping create falsified documents and websites, with automation meaning these scams happen on a huge scale. In the cases of website cloning, even after takedown requests, spoofed domains continue to resurface. While this case may not affect financial institutions directly, consumers handing over credentials and personal information can lead to further fraud down the road, with criminals using this personal information to commit credit card fraud, identity theft and synthetic identities.
AI is also being used in falsifying insurance claims. Cardiff-based insurer Admiral recorded a 71 per cent year on year rise in fraud during 2025, pointing to the increased use of AI to manipulate evidence. Criminals are able to manipulate images and fabricate documents that never existed. In addition to this, criminals are also committing romance fraud to coerce victims into submitting these fake claims, either asking them to say they have witnessed a car accident, or take out an insurance policy and file a bogus claim. Identity theft is also fuelling this fraud, according to the IFB, (Insurance Fraud Bureau) with criminals stealing personal details online, including through fake job ads and social media, to then take out policies in that person’s name. Again, this is another example of criminals targeting vulnerable individuals, using AI to further their deceit. And again, in isolation, it would be impossible for companies to identify repeating details to uncover criminal activity.
Conclusion
This growing sophistication across criminal behaviour in the motor industry reinforces an important reality for the motor industry – fraud cannot and must not be viewed as isolated incidents. AI is enabling criminals to operate across multiple institutions, products and channels simultaneously, with patterns often left invisible unless intelligence sharing allows it to be uncovered. As fraud continues to become faster and more convincing and increasingly connected, collaboration will be critical.
In 2025, National Hunter prevented £457m in asset and motor finance fraud through collaboration with its members. As AI fraud becomes more sophisticated, those best placed to respond will be the ones able to identify emerging trends early, share intelligence effectively and build defences that look beyond individual claims, applications or incidents.
Photo by Mark Rowe.
