How Smaller Lenders Can Improve Their Fraud Teams

Zahid Kassem, senior vice president of fraud and dealer management at Santander Consumer USA

DALLAS — As fraudsters continue to grow smarter and increase in activity, auto lenders have to be extra vigilant in keeping a close eye on their operations. From synthetic to impound fraud, the avenues in which lenders can be taken advantage of is growing. And while bigger lenders and banks have the resources to devote whole departments to snipping off fraud, smaller, independent lenders are a different story.

Catching and fighting fraud is important for any finance organization, but finding ways to combat it can be difficult if resources are minimal, such as at smaller-sized lending companies. However, there are areas that these lenders can prioritize in order to decrease the risk of fraud and have a better chance at reacting to it early on.

At the Auto Finance Performance and Compliance Summit, Zahid Kassem, senior vice president of fraud and dealer management at Santander Consumer USA, advised attendees on best practices to better combat fraud. For smaller lenders, Kassem advised on where to best begin building a fraud team.

“As a small lender, your resources are tapped,” Kassem said. “You can only do so much. If I was a smaller lender, I would focus on the prevention, because you need to utilize your front-end teams to identify that bad behavior upfront, rather than spending time on the investigation.

While an investigation can result in feedback upfront, educating underwriters or the origination team takes precedence. If underwriters better understand what to look out for, the chances of stopping fraud early are increased.

“And then I would say spend the money on analytics,” Kassem added. “Have a fraud strategist on your team that really can dive into the data and build strategies that you can deploy very quickly.”

How fast a lender can react after it has learned about fraud can make the difference in the long run, so having a strategist on the team who builds strong, fast plans for fraud is another way in which smaller lenders can better beef up their security.

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