Loan Fraud The Modern Way

When it comes to the topic of “fast money”, common sense often falls behind. This is particularly true of the numerous credit offers on the Internet. Especially with those loan offers which are offered without agency and without proof of income. A new scam shows the dangers of such offers.

Financial bottleneck, urgent purchase, unexpectedly high bill – the reasons for taking out a loan are manifold. As a rule, the overdraft facility, if available, is then drawn down or the loan is taken to the house bank. If you want to get a loan very quickly, the Internet with its seemingly endless number of online credit offers is often the first choice. But what happens if the urgently needed credit is rejected? Because, for example, the information system signals a possible credit default? Or because your own income is not sufficiently high in relation to the desired credit amount?

Special care with “credit without proof of income” offers

Burdened with such rejection of a loan and the resulting disappointment and despair, consumers see their salvation time and again in credit offers from the Internet, which read “credit even in the most difficult cases”, “credit without proof of income” and other rosy credit promises. Anyone who, because of their financial desperation, is marked by a supposed hopelessness anyway, sees the famous “light at the end of the tunnel” in precisely such loan offers.

A circumstance, however, which people with fraudulent intentions in particular repeatedly take advantage of with the help of the Internet and modern technologies. These fraudsters are also increasingly using modern technologies to get closer to their goal of credit fraud or to achieve financial success. The supposedly uncomplicated loans from the Internet turn out to be sophisticated credit traps.

Risk of credit fraud through “fake” identity checks

The latest scam? The use of the meanwhile quite common Video-Ident procedure. More and more frequently, credit offers are appearing on the Internet which potentially appeal to credit seekers with the already mentioned promise of a “fast credit without proof of income”. What then follows is well known: A simple online form must be filled out with some information and a credit commitment is promised within 24 hours. The commitment is usually made within a few hours. What follows is a novelty, however: the supposed credit provider asks the borrower to download an app that enables a so-called video identity, i.e. the visual determination of the personal identity. In doing so, the fraudsters take advantage of a law according to which, when granting a loan, it is absolutely necessary to establish the identity of the borrower.

Since the video identity is legally equivalent to the previously classic post-identity procedure and also has a certain acceptance in the market, many people do not suspect any possible fraud. In addition, the Video-Ident procedure promises that the credit applied for will be paid out immediately upon completion.

Identity theft enables goods fraud and money laundering

But what follows is what the supposed providers of such loans really have in mind: The tapping of personal data and screenshots of corresponding identification documents. Data with which money can then be “made” in many ways. Because with this data and the photos of the face of the rash borrower taken via the APP, several online accounts are then often opened at different banks without the knowledge of the person concerned. The fraudsters in turn use these accounts over several months for various money transfers.

Deposits into these accounts, in turn, come from bona fide buyers of actually non-existent items from “fake” sales platforms/auctions. If these platforms and the associated accounts are discovered, the alleged account holder will have a “rude” awakening. From a forensic point of view, the account holder is committing the criminal offence of being a financial agent by allegedly “providing” an account for fraudulent payment transactions (more about “financial agents” here). Although this scam is not entirely new, fraudsters seem to succeed time and again in setting up foreign bank accounts using the Video ID procedure in order to transfer funds from criminal offences, mostly abroad.

Is Video-Ident generally to be rejected because of the risk of fraud?

The question arises as to whether credit offers in which the Video-Ident procedure is offered as part of the processing procedure should generally be rejected? No – certainly not, because the procedure itself is not without reason legally recognised as such and is now widely used. However, it should be clearly pointed out that it is NOT REQUIRED to download an APP in order to carry out the Video-Ident procedure.

Furthermore, reputable websites clearly point out the provider of the Video-Ident procedure and explain in detail how this procedure works in detail. In addition to the fast and modern Video-Ident procedure, most banks, credit institutions, etc. still offer the possibility of proving their own identity by means of the classic Post-Ident procedure.