Fraud Detection: Alert System Applied to Credit Application
- The German credit history management company Schufa now proposes an alert service, called Update service, designed to warn the subscribers in case of attack on their personal data.
- This service includes SMSs or e-mail warnings. When the subscriber’s name is supposed to have been used by fraudsters to apply for a consumer credit, the victim receives an alert and can put an end to the fraud process before financial damage can occur.
- The credit score is updated every three months to assess the ability of the customer to pay his debt back.
- Update service is charged 10 euros per year; the subscriber also pays an 18.50 euros fee to the Schufa.
- This service,proposed by a credit bureau, relies on customers’ behaviour and takes into account their credit history to identify and avoid potential fraud attempts as well as related embezzlements.
- In France, the “negative credit file” should be set-up in the months to come and is currently under discussion. The issue of identity usurpation is central in the context of revolving credit application. Nevertheless, the framework planned by the French consumer credit reform should contribute to lower this risk.