The Role of Custom Modeling in Lending, Card Issuance and Insurance

Fraudulent insurance claims are responsible for more than $80 billion in losses per year in the United States, leading to higher premiums for all policy holders. It is estimated that card issuers will lose $1.3 billion this year from cards issued to synthetic identities. Total fraud losses from synthetic identities receiving loans and credit cards are estimated at $6 billion annually. Lenders, issuers and insurance carriers are increasingly combating fraudulent applications and claims with custom modeling solutions and AI.

Checking pay stubs to verify income is no longer sufficient. Completing an application with their authentic identity, a consumer can easily fabricate paycheck stubs or purchase them online for less than ten dollars. When fraudsters create synthetic identities to take out an uncollateralized loan with no intention of paying it back, they can just easily create or buy fake pay stubs to corroborate their synthesized existence.

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New Fraud Practice White Paper Discusses Techniques and Benefits Related to Identifying Low Risk Customers and Applicants

A new white paper from The Fraud Practice titled “Identifying and Streamlining Low Risk Customers or Applicants: Techniques and Benefits” is now available. This free white paper discusses the application of technology and techniques to derive signals of low or reduced risk and the benefits of identifying such orders in terms of conversion and screening costs when low risk orders or applicants can be streamlined or fast-tracked.

Identify Low Risk White Paper

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Mortgage Application Fraud Increases in First Quarter of 2019 as Fraudsters Become More Sophisticated in How They Fudge Their Income

The National Mortgage Application Fraud Risk Index maintained by CoreLogic found a six percent increase in mortgage fraud risk in the first three months of 2019 relative to the first quarter of 2018. Applicants lying about their income have been increasingly more difficult to detect in recent years, employing tactics such as lying about employment and promotions while providing false documentation to corroborate employment claims, as well as counterfeit college transcripts and divorce decrees.

Fraudulent applicants are taking advantage of the time it takes for new employment records and information to reach traditional credit and employment data vendors. Since 2016, CoreLogic has seen consistent increases in the number of applicants or borrowers claiming a new job or promotion that occurred within the past year.

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The Fraud Practice Releases a New Risk Management Technique White Paper Discussing Confidence Indicator Services

Confidence Indicators White PaperUsing Confidence Indicator Services to Enhance Qualification Capabilities in Online Applications” is the latest white paper from The Fraud Practice; released today and available free to download. This white paper defines and discusses Confidence Indicator services in the context of a “digital body language,” which can provide a view and indication of how a consumer answered critical risk questions that may validate or call into question what the user input or said. This can allow organizations to better detect high risk applicants, and accept more applicants where data was a limiting factor.

This risk management technique is defined and discussed in terms of how it works, the signals it provides and business use cases, to include application on-boarding, credit issuance and loan origination, insurance claims fraud and more.

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Fraudster Posed as Debt Collection Company to Obtain Consumer Identities

A fraudster was sentenced to over 17 years in prison for devising a scam where he registered fake debt collection companies to gain access to consumer PII which he then used to open almost 600 fraudulent credit card accounts.

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