Mobile lending increases risk of fraud

Loans on the go may be the key to locking in relationships with Gen X and other young borrowers, but there’s a risk associated with going that route. Mobile applications could increase the risks of fraud. According to newly released results from an annual LexisNexis Risk Solutions study, the costs of a fraudulent loan adds […]

Loans on the go may be the key to locking in relationships with Gen X and other young borrowers, but there’s a risk associated with going that route. Mobile applications could increase the risks of fraud.

According to newly released results from an annual LexisNexis Risk Solutions study, the costs of a fraudulent loan adds up for the lender. Results of the deeper dive into the issue show that a $100 fraudulent loan costs a lender $282 in lost principal, interest, fees and collection costs, as reported in an article in CU Times.

It explains, “At large digital companies, the average successful scam was $750, amounting to an average direct cost of $375,750 per month, or $5.1 million a year. Those foiled were worth an average of $3,478. Successes represented about 7 percent of the total value of attempts. At smaller companies, successes were $376, while thwarted attempts were $2,641 each. That added up to a direct cost of $48,504 a month, or $582,048 a year, and a dollar-weighted success rate of about 6 precent.”

Read the full article here.

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