Conducting lending carries a significant risk of fraud, which can potentially cause major financial loss. One such risk is fictitious credit. Financial institutions, like banks, mortgage companies, and other organizations that provide loan services, should have prevention strategies to mitigate any deceptive actions. In this article, discover more about the signs of fictitious credit and how to protect your business from it.
What is fictitious credit?
Familiar with headlines about people faking documents to obtain large sums of financing? That’s what fictitious credit is all about. Fictitious credit is an illegal action that involves falsifying personal or financial information in an effort to apply for a loan. Criminals commonly manipulate specific data or misuse other people’s identities to take advantage of others. A frequent example is altering bank statements to reflect a financial status much different from the actual condition in order to qualify for a loan.
How to identify fake documents?
There are several things you can do to differentiate official documents and those that have been altered, such as:
- Low quality of document
Of many factors, visual representation of the document is what we can easily see in the first place. The quality like margins or spacing, paper thickness, account number or IDs, holograms, or other distinctive details, can be vital to verifying document authenticity.
- Chaotic choice of words
Make sure to carefully review the document with close attention to content. An official issued letter usually has a professional tone of language, uses well structured sentences, and avoids contraction words.
- Information gaps
Compare one set of data with another set of supporting data that you have collected. Such as matching the amount of income in bank statements with payslips. Check for the consistency and conformity between documents to assess the reliability of the applicant’s financial claims.
- For bank statements, check the transactions
Carefully review the transaction history between periods. Assess if any unusual activity flags warnings or transactions that do not match the customer’s profile or known business activity.
Read also: Signs of Suspicious Transactions & How to Detect Them Automatically
In what ways can technology help anticipate fictitious credit?
Underwriting for loans includes multiple steps that take a considerable amount of time. As technology advances, numerous innovative solutions come to life designed to assist businesses in faster verifying the credibility and reliability of the borrowers.
- Face Authentication
Confirm the identity of a person by leveraging facial recognition, strengthening the security protection in the verification process. In practical use, this can help to cross-referencing facial features with identity documents or self-portrait that have been previously submitted.
- Optical Character Recognition (OCR)
Utilizing cutting-edge AI algorithms, OCR significantly improves preliminary assessment of prospective borrowers by automating document extraction. Capture critical information from ID cards, proof of income, application form, bank statements, and more. Fintelite OCR works automatically in less than a minute per upload without the risk of human error. It streamlines the verification process, allowing for seamless customer onboarding.
- Bank Statement Analyzer
Hundreds of bank transactions could take a long time to make sense of, not to mention the complexity, though. But by using the AI-powered Bank Statement Analyzer, you can instantly gain in-depth insights into a customer’s financial condition, allowing for more informed decision-making. Bank Statement Analyzer by Fintelite has advanced with a set of metrics to identify non-standard account numbers, unusual admin charges, odd RTGS transfers, mismatched balances, and more detailed measures.
Technology provides a significant boost to enhance customer assessment. Fintelite AI-advanced solution is tailored for financial companies looking for accelerating customer onboarding while keeping guard against fraud risk. Deep dive into customer’s money health through an engaging dashboard, from their transaction patterns to anomalies detection.
Get started now: Try Fintelite OCR & Bank Statement Analyzer for Free
