Point Predictive addresses latest fraud path with launch of EmployerCheck
Point Predictive recently rolled out a new tool that it says can be a simple but effective fraud and borrower misrepresentation solution that can help finance companies assess the validity of an employer stated by a consumer or third party on an application.
Now available through EmployerCheck, Point Predictive said every U.S auto finance company as well as mortgage originator, personal finance company, and bank now can receive a comprehensive report detailing nine risk factors for any reported employer without transmitting personally-identifiable information (PII).
Point Predictive highlighted that EmployerCheck was developed in response to the growing use of potentially fictitious employers on applications. In 2020 alone, Point Predictive said it identified a 300% increase in the use of potentially fictitious employers on consumer loan applications.
In one case, the firm indicated a single suspicious employer appeared on 667 different applications, exposing 19 lenders to more than $11.5 million in potential loan losses.
Point Predictive said eight different lenders ultimately funded a portion of those loans, resulting in a 50% charge-off rate for those contracts.
In recent months, Point Predictive’s fraud analysts have investigated hundreds of cases of potential fictitious employers. Many of these cases are the result of professional fraud ring activity, and it is easy to understand why this activity slips past unsuspecting loan review agents.
The firm said fraudsters easily set up genuine-looking internet presences and even have agents who answer telephone calls from lenders to fraudulently “confirm” employment and income.
According to Point Predictive, easily doctored paystubs complete the crime, while lenders and finance companies are left holding the bag.
“Misstated and fraudulent assertions by borrowers or third parties about employment or income costs lenders upwards of billions of dollars in losses,” Point Predictive co-founder and chief executive officer Tim Grace said in a news release.
It is no surprise that EmployerCheck is one of the most highly-anticipated new product offerings by our consortium lenders,” Grace continued. “Our team developed an incredibly effective and extremely lightweight solution.
“An EmployerCheck inquiry requires only two non-PII fields, and most lenders will see an astounding 84% exact match rate,” he added.
The firm highlighted the risk-detecting horsepower of EmployerCheck is the result of what the firm described as a broad, fit-for-purpose data set derived from Point Predictive’s innovative anti-fraud consortium.
The firm explained this consortium’s data contains employer information derived from 94 million recent and historical loan applications and grows at a rate of over two million applications per month.
Point Predictive mentioned every EmployerCheck inquiry scans more than 17 million true and fictitiously-asserted employers, five million business records sourced from the U.S. Small Business Administration, and a suspicious employer “hot list” that is updated daily by Point Predictive fraud analysts who investigate fraud activity across the U.S. every day.
Point Predictive co-founder and chief risk officer Frank McKenna said he delights at the ability to offer lenders and finance companies a convenient but powerful way to detect one of the most common and costly loan fraud tactics.
McKenna said, “60% of all fraud losses, or roughly $5 billion per year, involve a suspicious statement of income or the income’s primary source — employment — on a loan application.
“It has become so easy to submit and substantiate fictitious employers that an entire economy of ‘fraud-for-hire’ is emerging,” he continued. “It is a testament to the collaborative and innovative spirit within our consortium lenders that we are able to deliver such an effective solution.
“Every lender should make EmployerCheck part of its originations process,” McKenna added.
Point Predictive reiterated that EmployerCheck is available to any U.S. finance company and lender in either a file-based integration or through an application programming interface (API) integration.
The firm said an EmployerCheck inquiry requires only four inputs — the employer name and employer phone number, along with an application identifier and date — in order to receive a report with multiple alerts and risk scores.
Point Predictive mentioned that it can further accelerate customer onboarding with a single-page customer agreement and convenient month-to-month subscription for the first three months of use.
Point Predictive invites any finance company or lender that wishes to try EmployerCheck to contact the firm at firstname.lastname@example.org.