As Financial Institutions Face Greater Rapid Default Fraud and Credit Risks, TransUnion Fortifies its IDVision with iovation Suite of Solutions
TransUnion features its latest solutions at the 2019 Financial Services Summit Solution Expo
The proportion of consumers rapidly defaulting due to fraud and other credit risks continued to rise in 2018. To mitigate these risks, TransUnion (NYSE: TRU) unveiled today enhancements within its IDVision® with iovation® suite of products, most notably the inclusion of its new Rapid Default model. The announcement occurred today during the Solution Expo on the first day of the 2019 TransUnion Financial Services Summit, attended by more than 300 executives from across the globe.
Rapid defaults – including “bust outs” as they are often termed – consist of a ramp up of balances followed by 60+ days past due delinquency within 12 months. A new TransUnion fraud analysis found that a narrowly defined portion of rapid default consumers resulted in $1.0 billion in total loss exposure between April 2017 and March 2018. This was a jump from $0.8 billion in the same period one year earlier.
The analysis also found that the average loss exposure of an identified rapid default consumer is 50x higher than the average consumer delinquent balance in that same time period. Average loss exposure from rapid default consumers stood at $26,778 in the year ending March 2018.
These losses can be fraud related or happen as a result of other life circumstances. Accounts exhibiting rapid default behavior often are associated with broader bust out fraud and credit abuse schemes where borrowers open multiple loans in a short period of time. Subsequently they default on all of their cards, personal loans, mobile accounts, and even auto loans after racking up tens of thousands in outstanding balances.
Synthetic fraud schemes can also employ rapid default and bust-out tactics, using nothing more than a manufactured or manipulated identity to max out credit cards and acquire loans rapidly before going delinquent and leaving lenders with a hefty unpaid balance.
“Credit abuse and synthetic identity fraud are two of the greatest challenges facing financial institutions, causing significant losses which can be difficult to identify through traditional credit risk models, alone,” said Geoff Miller, head of global fraud and identity solutions for TransUnion. “That is why the Rapid Default model within the IDVision with iovation solution suite is a game changer – it predicts the risk of a bust-out consumer and gives businesses the ability to take action before losses accumulate. Furthermore, this score can be used to identify consumers with lower rapid default risks, who may now be eligible for credit line increases or other benefits.”
Fraud solutions such as IDVision with iovation will be prominently featured at the TransUnion Solution Expo. Other key products to be featured focus on Risk, Digital and Marketing solutions. Some of the key solutions to be highlighted include:
Auto Payment Shopper: Auto Payment ShopperSM bridges the gap between lenders, dealers and consumers by creating a personalized online marketplace for car shopping. The turnkey solution combines financing offers with dealer inventory into a one-stop shop for consumers to more easily self-select affordable vehicles during their auto search.
CreditVision: Trended and alternative data via TransUnion’s CreditVision® suite of solutions reveal the financial potential of consumers which helps enable lenders to offer credit to more qualified, and new-to-credit consumers.
Digital Marketing: TransUnion’s Digital Marketing offerings help its customers reach the right consumers by applying TransUnion data and audiences across digital marketing channels.
Mobile Offers Now: The Mobile Offers NowSM solution removes barriers and friction by helping consumers secure instant access to prequalified credit offers through a completely SMS-enabled mobile experience that includes prefill capabilities to simplify and expedite the application.
Prama: Prama® provides self-service analytics capabilities that help customers get to market faster. With line-of-business specific insights and access to 10 years of raw tradeline data for analysis in their own environment, customers can quickly go from discovery to solution development and deployment—in just days, not weeks.
About TransUnion (NYSE: TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Europe, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
We call this Information for GoodSM.
