Fraud prevention tool to detect lying loans
If you’ve ever stretched the truth about a loan application to look better for a bank, your chances of loan approval may decrease, thanks to a tool used to detect “liar loans” from a new startup.
Originally developed at the offices of PricewaterhouseCoopers (PwC), the Protect tool uses analysis, image forensics, machine learning, optical character recognition and natural language processing to help determine whether supporting documents for loan applications are genuine or fraudulent.
As the Australian Financial Review reported, three former PwC directors have left the company, taking Protect with them. Their new startup, Fortiro, can now provide Protect to more banks and financial services organizations without potential conflicts of interest as PwC audit clients.
Here are some of the banks and lenders that use Protect:
- Bank Australia
What does this mean for you?
As new and improved fraud prevention technologies are developed and deployed, it is more important than ever to be accurate and honest when applying for a home loan or any other credit product.
Having a loan application turned down can be frustrating, but it’s important to remember that the mortgage eligibility criteria are there to protect you and your finances, as well as the lender.
Even if you fudge some numbers a bit or omit a detail or two about your income and expenses, you are still putting your application, credit score, and personal finances at risk.
So-called “liar loans” can potentially make borrowers vulnerable to financial stress, because if you borrow too much money, you may find it difficult to manage repayments if your circumstances change. Additionally, fraud is a serious crime in Australia.
There are tools to help borrowers. For example, you can use RateCity’s How Much Can I Borrow Calculator to set your expectations for how much loan you can be approved for given your income and expenses. You can also check your credit score for free to get a better idea of how a lender might view you and your application.
You can also work with a mortgage broker to estimate your home loan budget and ensure your mortgage application is accurate and well optimized.