Author Topic: The identiy fraud repayment promise  (Read 6723 times)

RT45

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Re: The identiy fraud repayment promise
« Reply #30 on: April 01, 2017, 02:11:21 PM »
Still waiting to hear back for a response from my end.

rawraw

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Re: The identiy fraud repayment promise
« Reply #31 on: April 02, 2017, 05:25:57 AM »
I'm no stats quant, but I'm starting to think the probability of something being fishy is high if their identity theft rate is near 1%.

Edward Reid

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Re: The identiy fraud repayment promise
« Reply #32 on: April 02, 2017, 12:34:58 PM »
Interesting, though I don't have enough notes to be worth contacting LC ... I'll wait to hear more here. I found this article stating that 4.4% of identity theft involves loan fraud. (The article lists references, but I did not follow them to find out where they got this number.)

OTOH ... I wonder. LC only provides the loan proceeds as a direct transfer to a bank account. This means a loan fraudster not only has to impersonate the victim to LC, they also have to either gain access to the victim's bank account or set up an account in the victim's name. (LC probably does at least some rudimentary name match checks on the accounts they send money to.) If they have access to the victim's account, it's probably easier for them just to drain the account and not worry about refilling it. And perhaps this complication -- the need to break in twice rather than just one -- is enough of a hassle and delay to make the thieves look elsewhere. "I don't have to outrun the bear, I just have to outrun you."

I'll certainly be interested in the results, given that what LC has already told those who have requested the info is that their identify fraud rate is essentially zero.

Edward
« Last Edit: April 04, 2017, 10:13:07 AM by Edward Reid »

au88

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Re: The identiy fraud repayment promise
« Reply #33 on: April 04, 2017, 08:11:35 AM »
The results are in. LC says I've had 3 notes (out of ~20000). They gave me the 3 loan ID numbers.

Fred93

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Re: The identiy fraud repayment promise
« Reply #34 on: April 04, 2017, 03:11:51 PM »
I found this article stating that 4.4% of identity theft involves loan fraud. (The article lists references, but I did not follow them to find out where they got this number.)

I followed to ...
https://www.ftc.gov/system/files/documents/reports/consumer-sentinel-network-data-book-january-december-2014/sentinel-cy2014-1.pdf

Produced by FTC, with contributions from a network of contributors.  Large contributors were: Privacy Star,  Better Business Bureau, FTC.

Identity theft was largest category, ie most reported incidents, in their survey, at 332,646 incidents.  Page 12 shows "Loan Fraud" to be a growing fraction of total identity theft reports.  2012: 2.4%,  2013: 4.0%, 2014: 4.4% .

I then jumped to the latest book...
https://www.ftc.gov/reports/consumer-sentinel-network-data-book-january-december-2016
Identity theft was 399,225 complaints, and 13% of the total complaints.
Among identity theft, loan fraud was, page 12,  ... 2014: 5.1%, 2015: 3.9%, 2016: 6.8%

Yea, I know, they changed the 2014 number.  Govt agencies love to revise historical statistics.

So in 2016, this one network of info providers counted 27,147 cases of loan fraud.  However, because these providers are complaint gathering agencies, rather than banks, there is no total number of loans that I can divide by to get a fraction of new loans one might expect were opened by identity thieves.

Note tho that the growth from 2012 to 2016 was from 2.4% of total to 6.8% of total.  This probably aligns with the growth of online lending, online banking, etc.

Quote
..a loan fraudster not only has to impersonate the victim to LC, they also have to either gain access to the victim's bank account or set up an account in the victim's name. (LC probably does at least some rudimentary name match checks on the accounts they send money to.)

Most people underestimate the level of effort that serious thieves are willing to apply.  They may fail most of the time, but each time they win, they walk away with $25,000. or so.  If the bad guys gain access to a bank account, they could apply for multiple loans AND drain the existing money in the account.  Its not either-or.

A few years ago, I had money wired out of my account at a major stock broker.  The thieves were very well organized.  I was amazed at the array of techniques they had to delay detection.  They filed a change of address request with the broker, to misdirect my monthly statement.  (This was before we all went paperless.)  They deposited a (bad) check same day they wired out money, so that if anyone checked, the balance would look same for a few days.  Banks don't check signatures on checks, so this check looked like it went thru, and then was pulled something like 10 days later.  I got a call at that time "Say, that check you deposited a few days ago bounced."  to which I replied "What check?"

I got to know the back room people at the broker, and learned that a large number of accounts were hit the same day. 

There were other details that made it clear this was a very well organized team effort.  I won't explain all the details here, because it is off topic, and a long story.  I'll just say that there is a term for criminal team efforts that are well organized.  They call it "organized crime".

I think its a mistake to underestimate the bad guys.

Edward Reid

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Re: The identiy fraud repayment promise
« Reply #35 on: April 04, 2017, 10:18:53 PM »
I think its a mistake to underestimate the bad guys.

Oh yeah. I brought up one possible factor, but the numbers LC is passing out (like the 3 in 20K that au88 posted) sound very low to me. The ones that didn't make any payments, or only one, and LC was never able to contact them and charged off the loan ... how many of those were loan fraud, not just individuals taking a loan they don't intend to pay but, as you say, organized crime.

Still, I tend to think that loan fraud is harder than, say, skimming a credit card. But I don't doubt for a second that Bad Guys are working hard.

Edward

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Re: The identiy fraud repayment promise
« Reply #36 on: April 05, 2017, 02:00:40 AM »
I think its a mistake to underestimate the bad guys.

After reading your post, I put on my tiger-team hat for a second.  I now think it was I who was "thinking small" - and I see some wisdom in LC's decision to address these requests on an investor-by-investor basis, only for notes in which those investors have legitimate interests.
A little nonsense now and then is relished by the wisest men.