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Fighting Identity Fraud: 5 Steps to Prevention

Consumers providing false identity information, such as employment and income, is a form of fraud that costs auto financiers billions of dollars each year. Outreach to financial institutions to find creative solutions.

There are several ways lenders can protect themselves from fraud, including altered payslips and bank statements, and falsified credit histories. Here are some:

1. Rely on the experts: Lenders should hire fraud experts or assemble specialized teams trained to identify fraudulent information used to apply for credit. When fraud is detected, it is important for financiers to: involve law enforcement help build cases against fraudsters, Aaron Warnerfounder and CEO of a computer security company pro circularSaid auto finance news.

“When you’re dealing with hundreds of thousands of problems, it’s easy to fall into the void. [applications]said Warner. “There are many hands and many spaces between buyers, automakers and financial arrangements. [fraudsters] To find the gap in that armor.

2. Leverage artificial intelligence (AI): Lenders can implement AI-based fraud scoring technology to notify concerns about loan applications., Include whether the borrower used a false identity, falsified income, or included fraudulent payslips. Fraud scoring systems can usually detect what level of fraud exists (such as his 3% or 5% of the loan), so the lender can focus on legitimate borrower accounts. Frank McKennaco-founder and chief fraud analyst at a fraud detection technology company Point prediction, Said AFNMore.

3. Partner with Fintech: Fintech can provide external services that are time consuming and expensive to build. Ally Financialfor example, works with document analytics providers Informed IQ to flag fraudulent payslips using Robotic process automation (RPA) and AI. Mid-Atlantic Finance Companyalso worked with Point Predictive to identify income discrepancies and turbo pass, a software-as-a-service provider that analyzes and validates bank statements. “We have a wealth of different tools…helping us find discrepancies in salaries and income,” he said. Mike PereiraVice President of Lending Operations, MidAtlantic Finance.

4. Spread awareness: Financial institutions should ensure that everyone in the company is aware of the types of fraud that are prevalent and train staff on how to spot anomalies. VW creditfor example, train origination and service teams on how to identify what fraud occurs within a lender’s particular loan origination system.

5. Collaboration is key: Financial firms should share prevalent fraud data with other lenders to identify patterns and build prevention strategies. “Information sharing and development of its network [is critical] So that lenders can receive alerts,[Another lender is] Check to see if this type of scam is on the rise in your area. ” Catherine Romano SchnackLaw Firm Advisor mcgrincheeSaid AFNMore.

Many credit repair companies use the same data repeatedly, providing opportunities for lenders to flag loans using known fraudulent company names and other information, McKenna said, pointing to Point Predictive. identified over 8,000 fake employer names and phone numbers used for fraud.

Auto Finance Summit, the premier auto financing and leasing industry event, returns October 26-28 at Wynn Las Vegas. Find out more about the 2022 event and registration Fighting Identity Fraud: 5 Steps to Prevention

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