Banking fraud has several aspects. The best known is the one that affects cybersecurity regarding illegitimate access to third-party accounts, theft or leakage of personal data, or malicious apps on mobile phones that seek to get part or all of our money. But there is one aspect of fraud in which GDS Modellica specialises and affects us all insofar as all consumers and bank users pay for its consequences: fraud in lending activity.

It is a type of fraud whose explanation is not too mysterious: Loan fraud occurs when someone uses false credentials to gain enough credit with a financial institution to secure a loan, which they then use to cover their financial obligations. Although it may seem to us that this type of fraud is not very widespread, it is a situation that the central financial agents have to deal with on an ongoing basis, and that has in companies like ours strategic allies to support agile and correct decision-making that complies with the ethical and legal mandate of consumer protection.

Bank fraud and “predatory lending practices” are serious problems that can have serious consequences for customers and lenders. The volume of losses incurred is complex to assess as it depends on many factors, such as fraud’s severity, the bank’s size, the number of customers affected and the effectiveness of fraud detection and prevention measures.  Some estimates put the overall cost of these fraudulent operations at 10 billion dollars, although it is essential to point out that these are just estimates; a global balance is challenging to obtain because, logically, this information is only sometimes available. Furthermore, this cost isn’t only confined to monetary losses but can also involve a loss of customer trust and harm to the bank’s reputation.

At our firm, we wanted to take a look at some recent, high-profile cases in the industry to illustrate both the type of cases that occur (many, by the way, linked to the COVID-19 pandemic) as well as the consequences and the impact they have on the financial agents affected. We do so, once again, in our now classic infographic format, hoping that it will interest our readers.