TransUnion Bolsters Fraud Prevention Exchange as Online Fraudsters Continue to Impact Personal Loan Delinquency Rates
Newly released TransUnion (NYSE: TRU) data found that as personal loan delinquency rates rise, online fraud, which includes loan stacking, continues to make significant contributions to these increases. Serious delinquency rates (90+ days past due) at the conclusion of 2016 for personal loans originated in 2015 rose to 6.22%, up nearly 3% from the year-end 2015 delinquency rate of 6.05% for loans originated in 2014.*
Serious delinquency rates (90+ days past due) for personal loans with characteristics of online fraud stood at 11.02% at the end of 2016 for loans originated in 2015. Online fraud includes fraudulent loan stacking, which involves attempting to secure multiple loans from one or more lenders within a short period of time. While down from the 11.81% rate at the conclusion of 2015 for loans originated in 2014, it represents even more borrowers because of the continued growth in the personal loan space.
Number of Consumers with Personal Loans Continues to Rise
Number of Consumers with a Personal Loan
To combat online fraud, TransUnion has further expanded its Fraud Prevention Exchange to offer insights from the entire network of available TransUnion customer data – not just from Exchange members. These newest updates were unveiled today at LendIt USA 2017, a lending and FinTech conference.
As the prevalence of online fraud continues to grow, TransUnion’s vast data network allows us to mitigate the associated risk. Providing insights into fraud velocity from within our Fraud Prevention Exchange along with our new capability to include information about activity occurring across the TransUnion network – be it auto, credit card, mortgage or personal loans – sets us apart from the rest of the industry.
In October 2016, TransUnion launched the Fraud Prevention Exchange, which now includes established and emerging FinTech lenders, to enhance responsible lending. It is part of TransUnion’s IDVisionSM suite of solutions, which provides businesses with a holistic approach to fraud and identity management.
“Online fraud, including loan stacking, is an issue impacting lenders across the lending spectrum,” said Kevin Moss, chief risk officer at SoFi. “We are working with TransUnion’s Fraud Prevention Exchange because it can provide us insights from across its enormous network. Being even more confident in the loans we fund allows us to concentrate on better serving our clients in the best possible way.”
Fraud Prevention Exchange Benefits
The Exchange leverages the power of collective data and helps lenders face challenges brought on by originations fraud, including synthetic identity and loan stacking. Rapid information sharing among Exchange members is paramount in the battle against online fraud. With TransUnion’s Fraud Prevention Exchange, lenders can utilize collective data to strengthen existing risk systems. The Exchange enables lenders to:
- Reduce fraud losses without impacting the consumer experience and lending timelines.
- Receive real-time alerts (within seconds) to mitigate instances where lenders don’t discover problematic accounts until days or weeks have passed and losses may have been incubating unknowingly inside live loans.
- Utilize TransUnion’s vast network of customers inside and outside of the Exchange for more insight into originations fraud.
- Quickly adjust and adapt to evolving fraud threats and trends.
“For the last several months, I’ve spoken to hundreds of lenders that have expressed growing concern about online fraud such as loan stacking and synthetic fraud,” said Pat Phelan, senior vice president in TransUnion’s innovative solutions group. “As more lenders join the Fraud Prevention Exchange they are finding that the breadth of online fraud data we provide is unmatched and is helping them mitigate these risks.”
To learn more about TransUnion Fraud Prevention Exchange please visit http://transunioninsights.com/fraud-exchange/.
*TransUnion measured serious personal loan delinquency rates for loans that were 12 months on book at both the conclusions of 2015 and 2016.
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, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide.
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