The rise of online lending has lead to near-instant approval of loans. Applicants can apply (and be approved) for multiple loans in a matter of days, or even hours, as technology allows for partially automated underwriting, depositing often occurs within hours of approval.

Many consumers are choosing online lending options over traditional banks, due to faster approval process and even lower rates on some cases. The days of sitting anxiously before a loan officer are long gone.

Online lenders also provide service to the sizable portion of “underbanked” consumers. It’s estimated that approximately 45 million Americans fall into the “thin file” applicant category.

Without a credit report, vetting loan applicants can be difficult. A lack of information to go on, combined with with lightning speed turnaround times, means online lenders are faced with big loopholes that savvy fraudsters can take advantage of, often without consequence.

Lead scrubbing & vetting

When vetting out leads, time is of the essence. Since those leads are not only going to “Lender A” but to all their competitors as well, lenders are forced to decide efficiently and quickly which leads to accept.

By running Emailage first, and weeding out potential fraud risks at the onset, the team is able to focus time, energy, and acquisition dollars on the leads most likely to convert. The cost associated with Emailage is a fraction of that of the credit bureaus and other methods of fraud detection. This improves the efficiency of your downstream workflow.

We’ve seen strong correlation between a low Emailage score and good customers. We focus on fraud, but when it comes to lending, the line between credit and fraud is blurry, especially for credit bust out cases.

This approach ensures that your sales fulfillment team is concentrating only on the best leads, or “the cream of the crop” as they’d say back in Illinois, where I’m from.

Identity validation

The primary advantage of online lending is speed, so it’s very important to build a clear picture of who is behind an application. Verifying only basic data elements, such as name or address, opens lots of gaps. There’s no way to tell if the person behind them is actually a fraudster using stolen information.

The email address is perfect here, as it’s already collected as part of every application. Since the average email address is connected to 130 accounts, there’s lots history with an email address that is hard to for fraudsters to fake. This includes factors such as email validity, tenure, ownership, and previous transaction behavior.

Using this process up-front not only empowers fraud teams with intelligence for accurate evaluation, but also enables scalability to meet increased demand.

Loan applications & stacking

To “stack” loans, fraudsters only need stolen personal data. Which, unfortunately, is all-too-easy to acquire on the dark web.

Using this stolen information, fraudsters apply for multiple loans in a short timeframe. The key is to move quickly, hitting several loan companies at once.

The one signal that strongly indicates fraudulent intent in loan stacking is velocity.

In our world, velocity is all about how fast a single email is being used in multiple transactions. In this case, it’s loan applications. With velocity tracking, you can identify risky queries in real time and stop anyone attempting to apply for a large amount of transactions.

Say someone is mass applying for loans using the same stolen (or synthetic) identity. Each query of that email address is recorded. An email address queried frequently over a short timeframe will trigger velocity alerts, which warn customers about fraud patterns as they develop.

This process doesn’t only apply to applications at your company. It encompasses all transactions that are happening across our entire network, which links lenders into a global shared fraud database, facilitating enhanced early fraud detection and prevention.

In conclusion

The same technology that has opened lending access to consumers also makes an attractive target for fraud. We all know how quick fraudsters are to adapt and exploit weaknesses in an industry.

By taking a deep look behind the email address, that applicant isn’t going to look as “new” as before.


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