PenFed Credit Union is the latest auto lender to join PointPredictive’s auto consortium. The credit union will use the AI-powered company’s full suite of fraud prevention tools, Tim Grace, chief executive at PointPredictive, told Auto Finance News.
“The consortium actually contains over 60 million applications specific to auto coming in, and on a monthly basis, that number keeps growing,” Grace said. “We’re scoring about 1.5 million applications per month. That visibility into the behavior of the applications continues to build as more lenders are added to the platform, he added.
The consortium tracks applications from 30 to 35 lenders, with PointPredictive’s auto fraud manager issuing a score for each application and providing additional assessments against 100 conditions to help prevent fraud.
“One of the most popular features with auto lenders is a transaction grid, which can tell if a consumer has submitted an application at another location and will identify which information is different, such as an employer, for example, or income amount,” Grace said. Losses from fraud were expected to reach $7 billion in 2019, Chief Fraud Strategist Frank McKenna previously told AFN.
PenFed will also utilize the tech company’s Outsourced Fraud Management Solution, which the company launched in late 2019, Grace said. PenFed is the third lender to sign up for this service, but was unable to provide additional details. “When a score of 900 or above comes in, we have a team of forensic investigators that will go in and validate the information to see whether a Social Security number or an email really belongs to that name. And then they send the report and their forensic underwriting narrative to the clients’ fraud manager and say, ‘Hey, this is really bad, you need to look at it,’” Grace explained.
Negotiations between PenFed and PointPredictive lasted about four months, Grace said, but the credit union was onboarded in about a week.
“One thing we’re focusing on lately is returning the truth and trust back to lending,” he explained. “We’ve been encouraging lenders to go back to the day where [lenders] can believe the information consumers place on loan applications. We believe that 50% to 75% of the applications that we score low can actually be streamlined to reduce the inconvenience and the friction between lenders’ dealer partners and borrowers,” he added.
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