Nearly $2bn of credit apps red-flagged for fraud

by Adam Smith25 Aug 2014
Nearly $2bn of credit applications were red-flagged as potential fraud in the last financial year.

New research from Veda has shown $1.9bn in credit applications were red-flagged as potential fraud risks, but not all lenders assessing the applications were aware of the risks. The credit reporting agency said red-flagged applications grew 52% in two years, and are continuing to rise as a percentage of applications.

“While most major credit providers in Australia conduct fraud checks on credit applications, there are a number of lenders who process high risk applications unaware of possible links to fraudulent activities,” Veda general manager of fraud and identity solutions Imelda Netwon said.

Veda ran the analysis on $1.6tr worth of credit applications checked by its credit bureau in the year to 30 June 2014.

COMMENTS

  • by marty 25/08/2014 9:08:29 AM

    Without veda seeing the supporting docs of an application how can they verify if fraud or not.

  • by Darren 25/08/2014 9:17:20 AM

    Hi Marty,

    They can't. The red flag is an indicator for fraud. There are many models like this is the marketplace from Veda, RP Data, Genworth to name a few. They are provide an indication that their is a likelihood of fraud or misrepresentation and then the lender needs to flesh it out further.

  • by Country Broker 25/08/2014 9:20:45 AM

    This is SPIN , yes they are using data matching and algorithm analysis , as part of their process . I have found the integrity of some information held by VEDA to be questionable . Once they cab say to the industry , we have 99.9 % data integrity , they can start to throw stones .
    I also agree with the previous comment from Marty, how can they assert these documents if they have not seen the applications in question.