ATLANTA (4/08/08)--Nearly 20% of financial institutions are unaware of their financial losses from business fraud, said a recent Equifax study.
The results could be troublesome for some credit unions--who actively work to provide business lending services to their members.
The study also indicated that many organizations are still in the early stages of addressing fraud. Nearly 75% of businesses rely solely on credit reports to check for fraud, Equifax said.
To combat fraud, Equifax suggests that financial institutions:
Verify the existence of a business;
Target accounts that have been flagged with suspicious fraud attributes and require further investigation;
Confirm the relationship between the business and applicant; and
Decrease potential for applicants to be flagged as fraudulent because of mis-keyed information.
Equifax has created the Business Fraud Advisor solution to help financial institutions prevent fraud. The solution uses LexisNexis and database information to validate a business's identity and verify application data.
Application fraud accounts for 65% of commercial fraud and is the most costly in terms of business impact, Equifax said.
"While the prevalence of identity theft among consumers has been known for a long time, commercial fraud has only recently emerged as a major issue," said Michael Shannon, president of Equifax Commercial Information Solutions.
courtesy of cuna.org