Stop me if you’ve heard this one before.

Subprime auto lending has soared since the U.S. mortgage bubble burst back in 2008, and, predictably, default rates have started to follow suit. This week, 90-day auto loan delinquency rates eclipsed 3.8 percent, their highest levels since the financial crisis, putting auto loan investors and shareholders of subprime auto lenders at risk.

With interest rates still at historical lows, auto debt investors have been lured by the promise of yields as high as 5 percent. However, if too many of these loans sour, investors can be left footing the bill.

Accusations Of Lender Abuse

Some troubling anecdotal evidence of lender abuse has begun popping up regularly as well. Earlier this year, Santander Consumer USA Holdings Inc (NYSE:SC) paid $26 million to settle cases against the company related to abusive lending practices in Delaware and Massachusetts. As part of the settlement agreement, Santander admitted no wrongdoing.

In late May, Moody’s Investor Service reported that Santander verified the income of only about 8 percent of its auto borrowers.

“A lack of income verification … creates more uncertainty around whether borrowers will be able to afford their monthly payments,” the ratings firm said, according to CNN.

Related Link: Moody's Spotlights Troublesome Subprime Auto Lending

In an email to Benzinga, Santander defended its lending process.

“We are entirely committed to treating our customers fairly and lending responsibly," the statement said, adding that other variables such as down payments and credit history are considered in lending decisions.