Where Did You Go To High School? And Other 'Nosey' Questions To Ask
LAKE SUCCESS, N.Y.-Looking to beat fraud in indirect lending? Get nosey, recommends one pair of observers.
Robert Granados, vice president and general manager of finance solutions at DealerTrack, said that asking "out of wallet" questions is key for credit unions working to prevent fraud in the auto lending space, as well as for their dealer partners.
Granados noted that that means digging deeper and asking questions that only a legitimate borrower would know the answer to, including old addresses, high school information and other "esoteric data points that are not easily Googled."
"Right now, that's not being done at the lender level and they need to do it," continued Granados. "The reality of it is that if you're checking it more up front, and not just once the deal is booked, you could potentially start to spot trends that are coming," whether it be from particular regions or dealers. And the tech solutions that go along with out of wallet questions can help increase productivity by eliminating the need to make calls to verify income or employment.
Granados's colleague, Strati Papageorge, senior director of product management at DealerTrack, noted that in addition to technology to help verify a borrower, just solidifying relations with partner dealers on indirect lending can help mitigate the threat.
"The better you know your dealer and the better relationship you have, the less likely I think you are to have an incident where you have to take a loss," he said, adding that those relationships give a better feel for the kind of clientele a dealer draws, how compliant that shop is and more. Plus, he said, closer ties with a dealer can lead to more business and a more profitable relationship.
But, cautioned Papageorge, "it's an 'and,' not 'and/or.' " In other words, technology and close communication have to go hand-in-hand.