Fraud Friday 2019

2018 marks the year that the NAF Association placed tremendous focus on the topic of fraud in auto. Last year’s efforts by the association included education and awareness of the various types of fraud and the tools available to lenders to combat fraud. This year, the NAF Association is taking it to the next level by zeroing in on the two largest areas of concern/opportunity as indicated by our lender members; dealer fraud, and improving loan validations using technology. Attendees will want to stick around for the 2019 Fraud Friday session that features expert speakers and valuable information to help you improve your own process while strengthening your controls and defenses.

Our Fraud Friday sessions will feature a variety of brief presentations packed with useful and actionable data, with a moderated panel-style Q&A blended in. The goal of this format is to deliver actionable insights in a concise fashion, with presentation decks that you can bring back to the mothership to help spread the word and take action.

Dealer fraud
The indirect RIC purchase model is by its very nature inefficient. Dealers don’t always have adequate controls in place to manage the risk of fraud introduced by F&I managers, and anything short of intense owner oversight can result in tiny fraud opportunities blossoming into full-fledged fraud attacks. How many times have you heard from a dealer owner, “I have been out of the country for three months and I am just now discovering that my F&I manager is a crook, and they were the source of all this fraud. I fired them, so now we have solved the problem on this end.” All I can say to that is: sorry bro, people aren’t buying that anymore! Recent actions from AGs and lenders show that the heat is on, and it is time for dealers to actively participate in protecting against fraud and misrepresentation.
Our first group of speakers represent three unique perspectives on handling dealer fraud:

The Practitioner
Zahid Kassem is SVP, Enterprise Fraud & Dealer Management at Santander Consumer USA. Prior to Santander, Zahid led fraud and operational risk strategies and teams at Citi, Dell, Bank of America, GE, Netspend, and Ally. Zahid’s experiences at these companies that possess and deploy significant resources on fraud and risk are a helpful lens to understand some of the “best in class” methods for addressing fraud – with tons of hands-on detail and context.

The Data Sleuth
Josh Wortman is the founder and head of General Forensics, a data science partner to the financial services industry that has a particular focus on monitoring dealer behavior to assess business health and fraud risk. Josh’s data driven approach is innovative and insightful. I recently met Josh for lunch and he shared some his recent findings which I found to be fascinating and thought-provoking. Josh will be sharing these results with us in our session.

Frank McKenna is the co-founder and chief fraud strategist at PointPredictive, a data science company with solutions that are built to stop fraud. Point Predictive has developed a consortium database of “high-risk” dealers that provides more data to the loan acquisition process. Frank is the best at taking something complex and making it approachable, making him a highly sought-after speaker. Frank is always armed with tons of useful statistics, and his presentation is not to be missed.

Improving loan validations using technology
The process of validating customer stipulations (identity, income, employment, and residence) in most operational settings has not evolved, and is largely a judgmental exercise that involves little science. Verifying customer provided/dealer submitted stipulation documents can be easily converted to a mobile-enabled backbone that enables customers to provide access to information, such as banking and utility data that can revolutionize this process. This session provides lenders with insight into what is possible today that can have meaningful impact on your acquisition funnel, early payment defaults, and overall portfolio performance.

Our second group of speakers represent experts in using data to solve for stipulations and remove friction:

The Income Cop
Jonathan Principi is the senior director of Business Development with Envestnet / Yodlee. His extensive experience in financial technology solutions coupled with solutions that verify borrower income with frictionless, mobile-enabled make Jonathan a valuable partner. Look for this presentation to clarify the application of this new tech that is shaping the future of consumer lending.

The Resident
Aaron Gragg is fanatical about emerging startups, and recently joined Urjanet to help with their expansion into the consumer lending markets. Urjanet is a user-permissioned source of utility data that can be used to verify both the residence and identity of an applicant. Similar to validating income, users can engage with a frictionless process of credentialing that can effectively remove the need to stipulate for residence.

The No Stips Ringmaster
Mike Jarman is the co-founder and CEO of TurboPass, which utilizes a frictionless platform that has consumer-facing, dealer-facing, and lender-facing solutions that aim to identify, qualify and credential borrowers and ultimately eliminate traditional loan stipulations. Mike is an innovator with decades of experience working in the weeds with lenders and dealers alike that he has brought to bear on the solutions that he is bringing to market.

Fraud avengers – assemble!
The National Automotive Finance Association takes pride in staying one step ahead on key issues that matter to our lender members. Whether it is compliance training, compliance roundtables, creating standards and codes of responsibility, the association is here to help our members address the challenges of today and tomorrow. Fraud and indirect lending risk has been a topic ever since inception of the association 23 years ago. Today we have access to tools and tech that make eliminating fraud more of a reality than ever. I call on our lender members to participate in our Fraud Friday to help make it even more of a success that we can all share in.

Joel Kennedy is director of Business Development at Nortridge Software Company. He has a passion for growing and improving auto finance ecosystem. Joel has over 24 years’ experience helping big banks down to start-up finance companies to build, grow, improve, and repeat. He is the current president of the National Automotive Finance Association, and a board advisor to TruDecision. Joel can be reached at 240-308-2169 or [email protected].