Case study from September 2015

Many banks have to deal with fraudsters on a daily basis who try to obtain loans by forging identities or documents. Passports and payslips are at the top of the list of manipulated documents.

If fraud attempts are identified in good time, the loss averted is at least the amount of the loan applied for. TARGOBANK uses its own scoring models and other factors to assess the risk potential of loan applications and sends conspicuous applications to the in-house fraud department for examination. A decision on the authenticity of the documents submitted must be made within a very short time. This requires both speed and precision. If the documents are inconspicuous, the customer should be able to access the requested loan amount on the same day. A bank's fraud department is therefore particularly dependent on reliable and immediate information.

The verification process runs in the background: while the customer is sitting in a consultation, ID cards and pay slips are checked, among other things, while the fraud check runs in parallel in the back office. If reliable evidence of identity fraud, forgery or manipulated documents is found, TARGOBANK hands the matter over to the investigating authorities. The bank requires experienced employees with a trained eye to carry out the checks, as well as the bank's own software, which provides indications of attempted fraud on the basis of various logarithms.

The SCHUFA fraud pool is one of many building blocks in the prevention chain. Regular SCHUFA information can also provide a bank with indications of a possible fraud attempt: TARGOBANK, for example, has found it useful to ask how long a person has been registered with SCHUFA, i.e. how long they have been economically active: if the customer tells the bank that they have been working for many years, but their SCHUFA information only shows a recently opened current account, this can be an indication of fraud. Thanks to its comprehensive database of information on currently 66.3 million private individuals and 4.3 million companies, SCHUFA is in a position to provide valid information on almost every economically active consumer of legal age. The SCHUFA FraudPool therefore makes an important contribution to the effective risk management of banks in addition to the proven information provided by SCHUFA.

In case of doubt, for example if the SCHUFA fraud pool reports a reference to an attempt to manipulate a pay slip two years ago, this does not necessarily have to have a negative effect on the credit decision if the other information on the person is inconspicuous. However, such a reference gives the bank's risk department cause to take a closer look and, if necessary, to contact the reporting institution on the basis of a legitimate interest in accordance with Section 25h KWG in order to obtain details for a broader decision-making basis.

The SCHUFA FraudPool is all the more effective the more banks participate in the process and report the fraud information they have. In addition to TARGOBANK, 17 other banks and savings banks are currently participating in the system and filling the SCHUFA FraudPool.

A clearly defined catalog of information on suspected cases of fraud is collected and exchanged, as well as the information that a bank has filed a criminal complaint against a potential fraudster.

The more data is available in the joint pool, the greater the chance of identifying potential perpetrators before the crime is committed. When it comes to suspected fraud, both SCHUFA and TARGOBANK experience a great sense of community among the credit institutions, which support each other in fraud prevention despite healthy competition. For example, the police recently succeeded in arresting a fraudster who had been wanted for years and who had attracted the attention of TARGOBANK due to an attempted loan fraud with a forged identity. The bank therefore considers the criminal charges to be particularly important, despite the administrative effort involved.