The Rules of Thumb blog from MoneyThumb makes a point of educating ourselves on the unique challenges private lenders face and to share what we learn. Today we would like to discuss an ugly subject, and that is loan application fraud. In our modern age of technology--which provides so many great opportunities for both lenders and loan applicants--the flip side of that coin is how unscrupulous people can create a false financial history and use the information to try and obtain private loans.
To help you as a private lender to learn how crooks go about creating false loan applications and how to avoid falling for such a scam, take a look at this article from Identity Mind. The article even lists 8 Identity Verification Tests you can perform to prevent loan application fraud. For your convenience we have included those 8 tests below:
- Identity Document Verification
- Identity Data Validation
- Bank Account Ownership
- Out of Wallet Questions
- Identity Risk Scoring
- Out of Band Phone Identification
- Social Media Analysis
- Video Conversation
That article from Identity Mind goes into much greater detail, so if you are a private lender, do yourself a favor and read the article in its entirety. Identity fraud is a very serious offense and similar to identity theft. In fact, the two terms are pretty much interchangeable. The U.S. Department of Justice says both terms “refer to all types of crime in which someone wrongfully obtains and uses another person’s personal data in some way that involves fraud or deception, typically for economic gain.” Experian has an article that does a wonderful job of covering the 20 types of identity theft and fraud.
We hope that the information we have provided above can help you as a lender avoid unscrupulous people creating false loan applications directed at your lending business for the intent of obtaining a loan.
Before we close out this blog post, we'd like you to understand that MoneyThumb provides the best PDF financial file converters on the market. Using our tools can be an additional way to prevent identity fraud. For instance, our proprietary software can spot indiscretions and unusual loan application activity, such as a loan applicant listing an unrecognized bank. MoneyThumb has a version of our PDF financial file converters specifically designed for lenders. If you are a private lender, take a free test drive of our software today.