To The Point Podcast Episode 3: Using Fraud Tools to Avoid Fraud and Do More Business
In Episode 3 of our “To The Point” podcast, Flory Hunsaker, VP of Credit at Lentegrity, discusses the evolution of fraud and how fraud tools can protect customers while helping Lentegrity grow its business. Topics of this episode include:
- Lending Industry Concerns: Gain insight into pressing concerns in the industry, including the rise of tech-savvy fraudsters and the challenge of maintaining efficient fraud detection.
- The Power of AI in Lending: Discover how implementing AI alongside natural intelligence and manual underwriting is proving effective for reducing Lentegrity’s synthetic ID fraud rates.
- Flory Hunsaker’s Motivations: Learn how Flory’s passion for safeguarding victims resonates throughout her work, emphasizing the significance of protecting real consumers and lenders against fraudulent activities in the evolving landscape of technology-driven lending.
Listen now at the link or read the transcription below.
To The Point is a production of Point Predictive.
Transcript
Jeff Goldberg, Host
This is To The Point, a podcast from Point Predictive. I am Jeff Goldberg here at the 2023 Auto Lending Fraud Roundtable presented by Point Predictive, I’m joined by Flory Hunsaker, Vice President of Credit with Lentegrity, based in Southern California, and Flory oversees Credit and Dealer Management Risk. Flory, thanks so much for being here today.
Flory Hunsaker, Lentegrity
Thank you for having me.
Jeff Goldberg
Flory. Tell me a little bit about what are you seeing in the industry? Right now, when it comes to fraud and lending that really has you concerned keeps you up at night? What are you worried about right now?
Flory Hunsaker
I think the fraudsters have become so savvy and using the technology and the internet, the dark web and how savvy they become, has really kept us up at night. And being able to catch that fraud in a quick manner, where we’re still giving good service to all the great customers, you know, dealers or consumers. You know, you need to make decisions quickly. And if a fraudster is providing enough decent information that they look like they are a real consumer, you can make a big mistake if you do it too quickly.
Jeff Goldberg
So the big question, you hear that, and you say: Well, how do you stop it? And considering there are so many different ways that technology and AI can be leveraged? How do you get your arms around it?
Flory Hunsaker
So, we use some of the AI through point predictive that has served us well. Good or bad, our company at Lentegrity, we use AI along with natural intelligence, we do a lot of manual underwriting. And sometimes the fraudsters will leave crumbs. So, the score and the assistance and the alerts that Point Predictive provide in conjunction with some of the things that you might see as a manual underwriter has served us well. Since we implemented Point Predictive, you know, knock on wood, we’ve had very little known synthetic ID. So that has been a game changer. And as far as ID theft, I love working as a team with other lenders and Point Predictive and everyone that wants to fight fraud, to share information, so that we can work together to minimize ID theft. Because true ID theft; there’s just so many victims, there’s the dealer or the lender, the real consumer, it’s just really unfortunate that that happens at such a high percentage, in our opinion.
Jeff Goldberg
And for you talk about some of the ways in which fraud is being prevented, obviously, the working together working as partners working with Point Predictive, how has this sort of head of how has the game changed when you think back, maybe 5, 10 years about how obviously, technology has been central to that, but how has, how have things evolved in the industry, as you see it?
Flory Hunsaker
Well, it’s nice having the consortium, you know, 10 years ago, unless you really networked and had a friend, another person that worked at this bank, or that bank that you can leverage to call and say, you know, did you receive this application? What fraudulent information did you receive? You know, and then it just became more and more difficult to share information, you know, correctly in a legal manner. So having a consortium where we can share that information safely, for the consumer and for each other, is, has been has been the biggest difference.
Jeff Goldberg
And I like what you said earlier about sort of combining artificial intelligence and natural intelligence that you have to sort of have a nose for this and a sixth sense. Can you tell me sort of an example or a story where, you know, you’re combining the AI and your own expertise and experience really came in to help a situation?
Flory Hunsaker
Right, so with AI, it can help, you know, can give you some alerts, but you when you pause, and you look at a loan, and things just don’t add up, you know, maybe someone’s age, it doesn’t make sense for them to have that type of credit, or that new of a social security number, or why do they live in Los Angeles now, but everything on the credit bureaus from Tennessee, and why is the phone number from Texas, they’ve never lived in Texas. So looking at those things that not always can be caught by AI is something that we trained heavily for our underwriters to look for, because most people if you were born and raised in Texas and you move to Maryland, you’re not going to get a new Maryland cell phone number, you still have your Texas cell phone number. So those are the little crumbs that I think an underwriter can notice and see to just… could be a red flag could be nothing. But they have to investigate it.
Jeff Goldberg
I would imagine there also is a sort of, you know, in chatting about crumbs, communicating, I assume you and Frank McKenna from Point Predictive communicate, I don’t want to I want to be very clear, I don’t want to say it’s, there’s anything fun about it, but there is probably some investigative kind of work that goes into it, and working together. And when you can catch it, that has to be very rewarding, I would imagine.
Flory Hunsaker
Oh, yeah, I’m a self-proclaimed fraud nerd, I really do enjoy catching, if you will, a bad character, and sharing information and working with others to try and help and mitigate that kind of loss for not just our finance company, but any other finance company.
Jeff Goldberg
And have you seen that sharing of data have an impact across the industry? From people, you know, other organizations you work with?
Flory Hunsaker
Yes, yes, I do see people getting on board, you know, not as quick it’s, it’s, it’s a tug and pull, because we don’t make money if we don’t book loans. So, you know, if you’re in fraud and in risk, everything looks like fraud and risk to you until you deem that it’s not so you, you have to be conscious of that, that the way a finance company or bank could earn money is by booking loans. So, it’s a, it’s a balance. And yes, there are some lenders and colleagues that are more enthusiastic about fighting fraud than others.
Jeff Goldberg
You seem to be enthusiastic, which is good for your customers, I’m sure. Anything from today, when you think back to some of the things that have been said, a lot have been said, What do you take away? What’s resonating with you about anything that you’ve heard at the roundtable thus far?
Flory Hunsaker
That’s a good question. I think that having the law enforcement folks here and discussing some of the newer frauds that are being committed at the dealership’s expense, you know, the dealers are our consumers. So it was good to learn about that. So, we can disseminate that information to our dealer partners, and to be on the lookout and see what we can implement. So they specifically discussed, consumers paying down their loan fraudulently with a check they know is going to bounce when a dealer gets the payoff, you know, it’s not the real payoff (Listen to “To The Point” Episode Two). So that is one of the interesting facts that I’ve learned today for sure.
Jeff Goldberg
And what about the future? I asked you what keeps you up at night, but what worries you about what’s to come 2, 3, 5 years down the line.
Flory Hunsaker
Technology is what is our friend and our enemy. You know, so many consumers love the ability to buy online and not be there in person, and, and all of that. So how we use that technology as a tool to earn business and also use that same tool to avoid fraud. So that is really the future in my opinion, that we’re going to have to adapt and, and use more AI and, and more tools to investigate to make sure that we have the right consumer that is requesting the loan.
Jeff Goldberg
There are really two sides to that coin. And I know Frank McKenna said earlier, you have to fight fire with fire (Episode One). I mean, the technology is so advanced, and you know that the criminals are going to leverage it. You have to meet that head on right. Yeah. I guess my last question for you is about your desire in this industry. And what what is your passion? Where does it come from? You mentioned the bread crumbs. You mentioned, kind of that investigative element that I can tell is something that is really compelling to you, but where does your passion for this work come from?
Flory Hunsaker
It honestly, is protecting the victims. I feel really passionate about the real person. You know, when it’s true ID theft. There’s a real victim. So that’s the main thing and also the lenders being victims with synthetic ID. So, both of them, I feel very passionate about protecting lenders and protecting the real consumer. Because sometimes people don’t consider banks, you know, a victim, they think, Oh, it’s a big bank, you know, they can lose $30,000 Or they can lose $50,000. And no- it’s a big deal. It’s not Monopoly money. It’s that money’s coming from somewhere and someone down the line is going to pay the price whether it’s, you know, more interest rates, and I’m talking about everybody, not just us, but just, you know, less lenders someone may not be able to lend any more if they have too many losses. So, I think that’s what drives the passion for for fighting fraud is protecting the victims.
Jeff Goldberg
Well Flory, it certainly sounds like you’re doing it for the right reasons and the fight continues. Flory Hunsaker, thank you so much for joining us at the 2023 Auto Lending Fraud Roundtable presented by Point Predictive.
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