Database of over 17 million unique employers with application and performance history offers broad coverage, high exact match rates, and simplicity required to easily evaluate employer representations by any US loan applicant or third party.
Point Predictive, the San Diego-based company that provides machine learning solutions to lenders, today announced the availability of EmployerCheck™, a simple but effective fraud and borrower misrepresentation solution that helps lenders assess the validity of an employer stated by a consumer or third party on a loan application. Every US auto lender, mortgage originator, personal finance company, and bank can now receive a comprehensive report detailing nine risk factors for any reported employer without transmitting personally-identifiable information (PII).
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EmployerCheck was developed in response to the growing use of potentially fictitious employers on applications. In 2020 alone, Point Predictive identified a 300% increase in the use of potentially fictitious employers on consumer loan applications. In one case, a single suspicious employer appeared on 667 different applications, exposing 19 lenders to over $11.5 million in potential loan losses. Eight different lenders ultimately funded a portion of those loans, resulting in a 50% chargeoff rate for those loans.
In recent months, Point Predictive’s fraud analysts have investigated hundreds of cases of potential fictitious employers. Many of these cases are the result of professional fraud ring activity, and it is easy to understand why this activity slips past unsuspecting loan review agents. Fraudsters easily set up genuine-looking internet presences and even have agents who answer telephone calls from lenders to fraudulently “confirm” employment and income. Easily-doctored paystubs complete the crime, while lenders are left holding the bag.
“Misstated and fraudulent assertions by borrowers or third parties about employment or income costs lenders upwards of billions of dollars in losses,” said Tim Grace, Co-Founder and CEO of Point Predictive. “It is no surprise that EmployerCheck is one of the most highly-anticipated new product offerings by our consortium lenders,” he continued. “Our team developed an incredibly effective and extremely lightweight solution. An EmployerCheck inquiry requires only two non-PII fields, and most lenders will see an astounding 84% exact match rate,” he concluded.
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The risk-detecting horsepower of EmployerCheck is the result of a broad, fit-for-purpose data set derived from Point Predictive’s innovative anti-fraud consortium. This consortium’s data contains employer information derived from 94 million recent and historical loan applications and grows at a rate of over two million applications per month. Every EmployerCheck inquiry scans over 17 million true and fictitiously-asserted employers, five million business records sourced from the US Small Business Administration, and a suspicious employer “hot list” that is updated daily by Point Predictive fraud analysts who investigate fraud activity across the US every day.
Frank McKenna, Point Predictive’s Co-Founder and Chief Risk Officer, delights at the ability to offer lenders a convenient but powerful way to detect one of the most common and costly loan fraud tactics. “60% of all fraud losses, or roughly $5 billion per year, involve a suspicious statement of income or the income’s primary source – employment – on a loan application,” McKenna said. “It has become so easy to submit and substantiate fictitious employers that an entire economy of ‘fraud-for-hire’ is emerging,” he continued. “It is a testament to the collaborative and innovative spirit within our consortium lenders that we are able to deliver such an effective solution. Every lender should make EmployerCheck part of its originations process,” he added.
EmployerCheck is available to any US lender in either a file-based integration or through an application programming interface (API) integration. An EmployerCheck inquiry requires only four inputs – the employer name and employer phone number, along with an application identifier and date – in order to receive a report with multiple alerts and risk scores. Point Predictive further accelerates customer onboarding with a single-page customer agreement and convenient month-to-month subscription for the first three months of use.
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