PointPredictive, the artificial intelligence company that helps companies solve their misrepresentation and fraud issues, announced today that lenders have begun adopting its Synthetic ID Alert™ solution to help solve multiple operational issues more effectively.
“Synthetic identity fraud is costing banks billions of dollars and countless hours as they chase down people who don’t even exist,” said Alan McIntyre in a recent Forbes article (“The Battle Against Synthetic Identity Fraud is Just Beginning”). “Synthetic identity theft alone may account for 5% of uncollected debt and up to 20% of credit losses, or $6 billion in 2016, according to some industry analysts. The problem is even more acute with store credit cards and auto loans.”
The solution complements Auto Fraud Manager, the company’s comprehensive application and dealer misrepresentation and fraud scoring solution. Synthetic Identity Alert allows lenders to stop fraud by producing alerts on applications that exhibit high-risk patterns consistent with historical examples of confirmed synthetic identity fraud. With this solution, lenders only need to act on 0.5% of their total applications to stop a significant portion of their synthetic ID fraud.
As lenders adopt the solution, they are identifying multiple operational use cases to reduce their risk. They are using the solution not only to identify fraud, but also to better target fictitious identities that prevent them from accurately complying with their KYC (Know Your Customer) policies. Specifically, Synthetic ID Alert can help those lenders improve their customer identification policies by detecting anomalies involving real names and stolen social security numbers. These identities are part real and part fabricated – legacy systems are not well-suited to detection of these fabricated combinations.
In retrospective testing with lenders, PointPredictive data scientists have discovered that not all synthetic identity cases will lead to early payment default. In some cases, even when there are many red flags for a synthetic identity, some of these loans perform as well as the general population.
“Automotive lenders that have attended our consortium round table meetings have told us that knowing who they are lending to is of utmost importance from both a compliance and risk perspective” says Tim Grace, CEO of PointPredictive. “We are hoping the real-time speed and accuracy of Synthetic ID Alert and our unique and easy on-site testing and integration approach gives lenders the access to the tool needed to help them in their efforts.”
PointPredictive has taken a unique approach with Synthetic Identity Alert. The solution can be installed directly on the lender’s own systems and can be configured by the lender and/or incorporated into the lender’s own scorecards.
For more information on Synthetic ID Alert from PointPredictive, please contact [email protected] .