Financial fraud in 2017 presents itself in many forms, from synthetic identify theft to kickbacks and skimming. As America settles in with a new year and a new presidential administration, lenders are still looking for answers to loan stacking – a popular type of fraud that doubled in frequency during recent years, according to the Wall Street Journal.
Increasingly, lenders of all sizes are finding hope to curb the
Before lenders can reduce loan underwriting costs and approve more loans, they must first be able to authenticate eligible applicants and flush out the abusers. The fight against loan stacking is a tall task, given today’s environment of online lending, competitive pressure, and quick turnarounds. Fortunately, it’s a goal that leaders throughout the industry are tackling from multiple angles.
With subprime consumers now representing more than half of the market,
It is widely understood that subprime consumers have fewer opportunities to access credit because the underwriting process is more challenging for lenders. Whether because of low credit scores, or due to a lack of credit history (known as thin-file), these consumers are often forced to use alternative financial services to secure necessary funds.
Here’s the thing you need to know about alternative financial service providers: a large portion of them
What is loan stacking? How does a lender identify it? How can a lender stop loan stacking?
The basic definition of loan stacking is when a consumer takes out one or more unsecured loans or cash advances on top of loans of a similar type that already exist. Clearly, this poses additional risk to lenders because the more loans a consumer has, the less likely they are to repay all
It might surprise some lenders to know that not all credit reports are created equal, especially when it comes to loan stacking prevention. Traditional credit bureaus update lender information monthly to coincide with their billing cycles. Most lenders send bills once per month and report their data at the end of each cycle. That means it can take 30-45 days for new credit transactions to appear on a credit report.
Clarity Services has developed a groundbreaking new approach to loan reporting that can help lenders prevent a growing industry problem, loan stacking. Clarity’s Temporary Account Record is a patent-pending solution that helps eliminate the lag time that occurs between loan approval and loan reporting.
When an extension of credit or a loan is made to a consumer, a lender will generally only report the transaction on a periodic basis, often
Clarity Services, Inc. announced today the patent-pending status by the U.S. Patent Office that covers systems and methods for aggregating and providing data pertinent to the extension of financial or commercial transactions. This new application, called Temporary Account Record, will facilitate lender due diligence in determining a consumer’s ability to handle new debt.
Lenders frequently do not have the most current data on consumers with which to make the
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