Data released this week from TransUnion said online fraud methods including loan stacking are contributing to rising personal loan delinquency rates.
The serious loan delinquency rate, defined as those more than 90 days past due, rose three per cent at 2016’s end for loans originated in 2015 to sit at 6.22 per cent. Roughly one in nine (11.02 per cent) displayed characteristics of online fraud.
An increasingly popular method of fraud is loan stacking, where multiple loans are secured in a short period of time. While early reporting methods are being developed to shrink the reporting gap that contributes to loan stacking, they will take time to gain acceptance.
TransUnion has expanded its Fraud Prevention Exchange to offer the entire industry insights from the TransUnion data network. Launched in October 2016, it now includes established and emerging online lenders.
“As the prevalence of online fraud continues to grow, TransUnion’s vast data network allows us to mitigate the associated risk,” said Steve Chaouki, executive vice president and head of TransUnion’s financial services business unit. “Providing insights into fraud velocity from within our Fraud Prevention Exchange along with our new capability to include information about activity occurring across the TransUnion network — be it auto, credit card, mortgage or personal loans — sets us apart from the rest of the industry.”
TransUnion said the Fraud Prevention Exchange allows lenders to reduce fraud losses with no customer experience impact, receive near-real time alerts of potential problems and the opportunity to exchange information with other lenders.