high relative to their stated profession or if there is a sudden, large shift relative to the income they earned compared to the previous year. o Prevention tips: Third-party vendors, such as Inscribe, can be instrumental in finding inconsistencies in an applicant’s income. These third-party automated systems can provide insight into which documents may or may not be fraudulent, such as pay stubs, W-2s and bank statements. • Rushed application process: Often, fraudsters will want to rush the application process to minimize the chances of being caught. Be extra cautious if an applicant pressures you or your team for quick approval. o Prevention tips: Slow it down. Take your time and review the application carefully. The applicant could innocently want to expedite the process to get the desired result sooner. Regardless, never allow their need for speed to accelerate the process to the point of negligence. • Use of stolen identity: Stolen or fabricated identity documents may be used by bad actors applying for loans. Be vigilant about verifying the authenticity of the provided documents. o Prevention tips: Leverage third-party vendors to help identify stolen or faked identities. Companies such as Vouched can review identification and provide accurate, real-time insights into the authenticity of the documents. Alternatively, your team should be looking for any missing holograms, cheap lamination or identification that does not have images under ultraviolet light. 2 CLOSING THOUGHTS As financial institutions navigate the lending landscape, it is important to adopt a stance of informed prudence. The battle against fraud and deceit requires unwavering commitment, steadfast due diligence and a keen awareness of the red flags that hint at ulterior motives. By employing a multifaceted approach that blends human discernment with cutting-edge technology, institutions can safeguard their assets, their reputation and the trust placed in them by their customers. 1. https://www.ftc.gov/news-events/news/pressreleases/2023/02/new-ftc-data-show-consumers-reportedlosing-nearly-88-billion-scams-2022 2. https://www.gettips.com/blog/fake-idcheck#%3A%7E%3Atext%3DA%20fake%20ID%20is%20 often%2Creal%20IDs%20to%20prevent%20counterfeiting THANKING OUR SPONSOR, BELL BANK Visit us at bell.bank With a team dedicated to correspondent banking, Bell Bank provides flexible underwriting, competitive lending terms and prices, fast decision-making and consistent communication. Having partnered with hundreds of community banks, we’ll help you enhance your customer relationships through our experience-based expertise in participation loans, bank stock, ownership loans and equipment financing. Efforts to obtain funding through fraudulent means can often be recognized during the initial application review or customer interaction. Community Banker 25
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