Risk alert: Fraudulent loan applications utilize physicians’ personal information

CUNA Mutual Group has issued a risk alert about multiple fraudulent loan applications that a Northeast credit union received via online applications that appeared to originate from prominent physicians. The FBI is investigating and suspects an organized crime ring is seeking to victimize physicians with high credit scores and substantial income, according to the alert.

The credit union reported that seven separate loan applications were received via their website, each requesting personal loans. Since online account opening has become common practice for credit unions, particularly during the pandemic, several scam scenarios have been discovered and the “physician scam” appears to be the most recent in a long list of fraudulent activity targeted at credit unions, according to the risk alert.

The applications were all from actual physicians and included the address, Social Security number and date of birth of the “applicant.” Only the phone number was changed so the fraudster could control communication and the area code was from a different state than applicant’s address, according to the alert. Loans were closed using electronic signatures.

According to the risk alert, to help identify and prevent approval of fraudulent loan applications, credit unions should:

  • apply increased scrutiny of applications received via online or non-member facing channels;
  • utilize a fraud detection service to validate addresses associated with the name and Social Security number provided on the loan application;
  • for applicants in a public profession, complete a Google search to confirm the online photo  matches the driver’s license photo;
  • scrutinize paystubs for any irregularities;
  • use a verification service to validate income and employer information or contact the employer to verify employment status;
  • utilize a knowledge-based authentication service prior to allowing loans to be signed via electronic signature, and employees should take note of missed questions; and
  • educate lending staff and hiring managers regarding this scam and characteristics of fraudulent paystubs.

CUNA Mutual Group’s risk alerts may be accessed on their Protection Resource Center. Log-in is required.

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