Where do you go from here?
These are just some of the common schemes floating
through the industry. Here’s what you need to know
as you build your fraud detection program:
Who are your allies?
Your biggest allies in the fight against fraud are your
employees. They need to be well trained on the fraud
schemes out there, but more importantly, they need
to know to whom to send potential fraudulent loans,
should they find something. And, your organization
should encourage the escalation of possible fraudulent
loans. If an employee is worried that they might get
in trouble for “killing” a loan that may possibly be fraudulent, they won’t
escalate it. If anything, your employees should be rewarded or commended
for finding fraudulent loans. In addition, having a designated “fraud czar” in
your organization that can really dig into these fraud tips is a huge value to
your organization. If you’ve got someone on your team who’s got that police
detective mentality, cherish that person because they’re hard to come by.
Who are your enemies?
Your enemies can be anyone involved in the loan chain (including your own
employees). I don’t mean to say that you should breed a culture of mistrust
for anyone or any entity interacting with your loans, but you should be very
careful. For example, a broker may not be directly involved in the fraud
scheme, but they might not look as closely as you’d want them to look. Declining a fraudulent loan may be the difference between a broker making
money in a month or not. That’s a compelling motivation for anyone to
look the wrong way.
What information can’t you trust?
■ ■ ■ Websites: These are too easy to fabricate‚no matter
how legitimate they look. Lookup the ICANN WHOIS3
for the website. This will tell you when the website was
first created. If the consumer is indicating a two-year
employment history and the company website was created yesterday, further research is necessary.
■ ■ ■ Bank statements: Both the final balance, starting
balance, or individual credits/debits are frequently (and
easily) modified. Verifications of Deposit should be
ordered on any questionable document. Look to alignment of the text and font sizes for clues as to what might
have been done to manipulate a document.
■ ■ ■ W-2s: Google “create my own W- 2” and see what comes up. It’s astounding. To help identify fake W-2s, be aware of the max tax limits, round
numbers, and inaccurate math. Just because the W- 2 looks legitimate
doesn’t mean that the underlying data is.
■■ ■ Identity documents: Fake IDs and identity theft are common. The
Patriot Act requires that those documents be verified, but sometimes the
fakes look perfect. Be diligent and question inconsistencies.
■ ■ ■ Diplomas: Another document which can be faked easily online. The
National Student Clearinghouse is a great way to identify if questionable
degrees are valid or not. 4 This tool is one specifically referenced by the
government-sponsored enterprises (GSEs) as a tool that should be utilized
whenever a questionable diploma is provided. That said, not all colleges and
universities are connected with the tool, so it might not work all the time.
■ ■ ■ Verification of Employment and Cell Phones: It can certainly happen,
but most employers have land lines. If a cell phone number is provided
to conduct a verbal VOE, that should be a red flag. Look to tools like
allies in the
fraud are your