Today’s online lenders are in need of robust and intelligent fraud prevention solutions which equip them to fight sophisticated frauds, often initiated by fraud rings. This online lending exchange connects consumers with multiple lenders, credit partners and banks and was experiencing high levels of fraud, particularly from fraudsters abusing the complimentary credit score service.

Using the ThreatMetrix solution, the lending exchange slashed cost associated with high manual reviews and unnecessary credit checks, while reducing fraud. This helped maintain the company’s trusted reputation and minimized friction for trusted users.

Business Problem

This lending exchange provides customers with a complimentary credit score along with lending options with different banks, lenders or credit partners. The complimentary credit score is provided through a third-party credit bureau that verifies customer information for a fee to the lending exchange. Problems started to arise when fraudsters took undue advantage of the credit score service, creating new accounts to verify stolen customer information and resell it on the dark web. The lending exchange initially leveraged traditional network-level defenses, such as IP address restrictions, to stop fraudsters from leveraging this service. However, traditional methods were found unable to match the pace of sophisticated fraud techniques used by these fraud rings.

Facing thousands of weekly fraudulent requests, the fraud team was unable to keep up and required a robust solution to:

  • Identify fraudsters in real time even when they were using multiple devices, IP addresses and locations.
  • Accurately distinguish fraudsters from real customers.
  • Reduce cost associated with misuse of credit check service
Leveraging ThreatMetrix Digital Identity Network to Restrict Fraudulent Credit Check Requests

The ThreatMetrix solution is powered by the ThreatMetrix Digital Identity Network which harnesses global shared intelligence from millions of daily consumer interactions including logins, payments and new account applications. Using this information, the lending exchange leverages a unique digital identity for each user by analyzing the myriad connections between devices, locations and anonymized personal information.

Behavior that deviates from this trusted digital identity can be accurately identified in real time, alerting the lending exchange to potential fraud.

Benefits of the ThreatMetrix Solution
  • ThreatMetrix Smart ID helps the lending exchange recognize returning devices even when cookies are deleted or disabled. Derived from the analysis of many browsers, plug-in, and TCP/IP connection attributes, Smart ID generates a confidence score that detects multiple fraudulent account creations from a single device. The ThreatMetrix solution detected new account creation attempts as high as 500 per device per week and hundreds of thousands of such fraudulent events were blocked over the year.
  • Deep connection analysis technologies give a clearer view of suspicious events. Fraudsters often attempt to hide behind location and identity cloaking services such as hidden proxies, VPNs and the TOR browser. ThreatMetrix accurately detected the use of these technologies and, in the case of proxies and VPN, allowed to see the true IP address, geolocation and other attributes of each event.

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