Our approach to the development of a credit bureau is to harness the power of the data that is available in each market.
Fraud is a growing problem in credit industries around the world. The most effective strategy to reduce the substantial cost of fraud is prevention, based on information. This means that suspicious new business must be identified at the earliest possible opportunity – at the point of application.
The majority of application fraud directed at credit grantors involves an applicant 'bending the truth' when completing application forms. This is known as 'soft fraud'.
Some occurrences are relatively harmless and go undetected, but others result in inappropriate extensions of credit, bad debt and all the associated costs which arise in the collections and recovery process.
'Hard fraud' is less widespread, but the effects on lenders are frequently more devastating, both in terms of the speed and size of the losses. Most hard fraud is sophisticated, well researched, planned in detail and is often targeted at high volume credit grantors.
Operating nationwide and using either false identities or misusing the identity of genuinely creditworthy people, hard fraud is often perpetrated by organized crime rings and can be difficult to detect using traditional credit underwriting techniques.
Experian offers innovative software packages to help lenders combat fraud. These work on the principle of comparing the details provided by the applicant with those provided in the past and highlighting any anomalies and inconsistencies, which are then referred to the lender for further investigation.
Our software highlights suspicious applicants by:
Sophisticated data matching algorithms are used to identify any inconsistencies in credit applications. These algorithms are customized to maximize the effectiveness of the data available in different countries. Flexible rule setting allows for a rapid response to changes in fraud trends.
Cross-checking information provided previously or given to other lenders is an effective method of identifying both hard and soft fraud. Below are some examples of how our software can assist in the prevention of fraud:
Used at the point of application, Experian's fraud prevention software helps lenders identify potential fraudsters prior to extending credit.