Clarity’s fraud team exercises round-the-clock vigilance by utilizing the subprime credit industry’s largest database. Below are the details of one example of how Clarity works with clients for industry-leading security against fraud.
Fraud Ring Moniker: Excel Vision Capital
Modus Operandi: Listing “Excel,” “Vision” or “Capital” as employers on applications, among other red flags
Clarity Fraud Team Member: Bruno Gomes, Certified Fraud Examiner, 14 years of experience
The Win: Proactive information sharing and communication between Clarity and our client exposed the fraud ring, yielding a more lending-friendly environment for all of our lenders.
For years, Excel Vision Capital has been on the radar of Clarity’s fraud team. Like many fraud rings that are constantly probing for weaknesses in a lender’s security, this one features at least one common fraud signature: the bogus and frequent listing of the same three employers on applications. Bruno Gomes, CFE, says fraudsters take advantage of having zero scruples in their criminal methods, so they’re willing to try anything that might work.
“When fraudsters are convinced of their own good ideas, they like to repeat past behavior, and that is often their downfall,” Gomes says.
“As the good guys, Clarity and our clients abide by established procedures and compliance laws. That’s why we exercise round-the-clock vigilance. Open communication with a client not only helps us protect their business, but also every other lender a fraud ring may be testing. They don’t stop with just one.”
Preventing Negative Volume
The most important resource Gomes uses to keep clients safe from fraudsters is Clarity’s industry-leading database, which is the gold standard for unique subprime consumer identities. When the fraud team spots a signature, they reference Clarity’s continually growing database.
A signature acts like an alert, and Clarity’s database contextualizes what it might mean. Sometimes, data that may or may not be relevant to one fraud ring proves valuable in profiling another criminal enterprise.
Fraud signatures can be any suspicious activity that forms a pattern of deception. When suspicious activity occurs among these signatures, the fraud team scripts code to track the behavior and prevent negative volume against lenders.
While tracking and preventing fraud can be a long and arduous process, it often comes down to common sense in the analysis of our data. Essentially, when a fraud team member notices something odd, a bit of digging into the details reveals a highly unlikely profile for an applicant.
“Often, fraudulent information is pretty straightforward,” Gomes says. “It’s often a matter of tracking behavior and following through on referencing.”
Operating in the Shadows
Stealth is a fraud ring’s primary advantage, and they try to maintain the advantage with unpredictability and pattern breaks. Fraudsters may blitz multiple attacks on one or multiple lenders, or they may attempt a fraud signature to serve as a distraction. They may lay dormant for more than a month, or they may be perpetrating a completely new strategy.
“Fraud rings often appear to be squirrelly,” Gomes says, “which may be due to a lack of connecting evidence to other fraudulent attempts.” A ring can have anywhere from one to dozens of participants, and any individual may participate in a number of rings and strategies. A fraudster’s only limits are their imaginations.
“That’s why our fraud team is always tracking and updating data,” he says. “Even if a company has their own fraud department, they’re usually limited to their own portfolio.”
With more than 62 million unique subprime identities, Clarity’s database is the largest in the subprime industry. That means Gomes and his colleagues have the advantage of far more visibility into potential fraud than anyone else in the subprime and near-prime space. And, information continues to be added to the database, reducing blind spots.
“Client communication not only helps both parties make the most of our resources, but it also educates our clients on what to look for and how to detect fraud,” Gomes says.
Security in Today’s Market
As the saying goes, with great power comes great responsibility. The Clarity team appreciates the importance of effectively targeting our client’s goals by leveraging the industry’s largest subprime consumer database. As market conditions rapidly evolve, which today means longer loan terms with larger amounts online, the value of differentiating credit risk from fraud risk has significantly increased.