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

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Australian Broker | 25 Aug 2014, 09:03 AM Agree 0
Nearly $2bn of credit applications were red-flagged as potential fraud in the last financial year
  • marty | 25 Aug 2014, 09:08 AM Agree 0
    Without veda seeing the supporting docs of an application how can they verify if fraud or not.
  • Darren | 25 Aug 2014, 09:17 AM Agree 0
    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.
  • Country Broker | 25 Aug 2014, 09:20 AM Agree 0
    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.
  • Eric | 25 Aug 2014, 09:21 AM Agree 0
  • Papery | 25 Aug 2014, 09:37 AM Agree 0
    Says a lot for the verification processes of the Lenders at application stage if they are red flagging so much potential fraud after the approval & funding
  • Denise Brailey BFCSA (Inc) | 25 Aug 2014, 09:47 AM Agree 0
    Unverified Lending since 2008 and Veda speaks of "Fraud Checks." Not in our experience in dealing with banks - the fraud is internal to the banks. I agree with you Marty....without Veda seeing the supporting docs of an application how can they verify if fraud or not.
    Consumers are waking up. Even David Murray is warning what comes up must come down. There has been widespread approval of unaffordable loans and the consumers had no idea of the frauds and were forced by packaging to take credit cards they had said NO to.
  • Steve McClure | 25 Aug 2014, 10:00 AM Agree 0
    That's a substantial 12.5% in terms of $ volume, but what are the parameters defining fraud? Without the nature of the samples, demographics, application numbers etc., these figures are meaningless. Unless of course, you are trying to sell your service using the tool of fear and danger.
  • WillW | 25 Aug 2014, 10:04 AM Agree 0
    I note there is no definition as to what they refer to as fraud. Is this nothing more than a feeble attempt at getting some media coverage ?
  • Denise Brailey BFCSA (Inc) | 25 Aug 2014, 11:27 AM Agree 0
    I do this voluntary and a great desire to retire. I am a criminologist specialising in white collar crime. I have given bundles of evidence to the courts (victims have won against the lenders) and the Parliament and the Media. I do not make ad hock claims. Everything is backed by hard core evidence - sadly. I spent time collectively gathering people together as they needed help. Its an humanitarian thing.
  • Denise Brailey BFCSA (Inc) | 25 Aug 2014, 11:29 AM Agree 0
    Definition of Fraud is intention to deceive. It is the intention of lenders to deceive both the borrowers and sellers as occurred in sub prime lending in America. The approval of unaffordable loans.
  • Steve McClure | 25 Aug 2014, 12:55 PM Agree 0
    I think I miscalculated before, $1.9Bill vs 1.6Trill (trillion being a million, million) is 0.12%, i.e. 1 in a thousand.
  • Ray Perth | 27 Aug 2014, 12:00 PM Agree 0
    Denise Brailey, you seem to be going way over the top here. Calm down. Yes regrettably there has been some fraud, no one disputes that. But in but reality it is still a relatively small %.
  • Denise Brailey BFCSA (Inc) | 27 Aug 2014, 07:56 PM Agree 0
    My evidence is clear: Aggregators are busy saying fraud on LAFs is as I said to the Commissioner: "How is it that looking over 1500 LAFs over past few years there is a 100% instance of "tweaking" yet those alterations are done after the forms are sent to the processing people internal to the bank. ASIC does not disagree. Seller originals and bank copies do not match up and always third persons handwriting! We do agree only a small % of sellers are supposed rogues in any industry so what is happening to documentation provided by 97% of you? Do you ever SEE the document after the bank has received it? We do. Only Royal Commissioner will be able to ask bankers: "why is that so?" Did you ever ask why it was suggested that sellers never give a copy of the 11 page LAF to the customer at point of signing? No-one in other countries received one either. This is a very big picture. FBAA should be warning you all to give customer a copy at signing...then the bank cannot tweak. Simple.
  • SEQ BRoker | 27 Aug 2014, 08:04 PM Agree 0
    Dang. Is Veda now looking to offer more services. Like keeping records of everyone being behind on rent by 7 days is not enough work for them. They are looking for chargeable hours and don't care about the industry they are serving... just the hours. Yes there have been and will continue to be a small percentage of fraudulent applications, that are now exposed for the authorities to audit and the perpetrators will be dealt with by the correct authorities. Brokers don't need another big brother.
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