Banks Are on the Front Lines of Fraud Prevention. So Are the Tools They Recommend.

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A recent Nasdaq article laid it out plainly: banks are no longer just gatekeepers—they’re also first responders in the fight against fraud.

This echoes a growing call from regulators like the Consumer Financial Protection Bureau (CFPB): it’s not enough to respond to fraud after it happens. Prevention has to start upstream. And for many lenders, that means looking closely at how their dealer partners handle credit prequalification and customer onboarding.

How the Fraudsters Operate

Fraudsters today don’t walk into branches with fake IDs—they submit fake applications online or use synthetic identities generated from stolen or fabricated data. They exploit weak prequal tools, skip verification checks, and walk away with fraudulent approvals—especially in the indirect lending channel where oversight can be looser.

What Red Flags Are Missed

No ID verification at prequal
Reuse of breached consumer data (names, DOB, SSNs)
Inconsistent data matching between lead and bureau pull
Lenders trusting that dealers are doing the vetting

And the biggest miss? Assuming the lead is real just because a credit score came back.

Who Pays the Price

Consumers, whose identities are stolen or misused
Dealers, who end up with chargebacks or lost vehicles
Lenders, who are left with fraud losses and increased regulatory scrutiny

This is where the CFPB’s scrutiny intensifies: they want banks to be part of the solution, not just victims of the problem.

What Could Have Stopped It

Start with VeriQual™.

This patent-pending solution validates a customer’s identity and returns a credit prequalification—all from just a phone number. It’s fast, low-friction, and works before any PII (like SSNs or DOBs) is ever entered.

That means:

Dealers don’t waste time chasing fake leads
Lenders receive verified, credit-qualified leads
Fraud is blocked before it enters the CRM

And because VeriQual is integrated directly with credit bureaus via trusted resellers, it offers a seamless plug-in to existing lender-dealer workflows.

A New Standard for Shared Responsibility

Nasdaq’s message is clear: fraud prevention isn’t just a compliance function—it’s a strategic imperative. And that responsibility extends beyond the bank’s four walls.

At FlexPath, we believe lenders need to equip their dealer partners with tools that protect everyone in the chain—especially consumers. VeriQual was built to do just that.

So whether you're a direct lender, credit union, or indirect auto finance provider, it's time to ask:

Are your dealer partners using VeriQual—or are they leaving the door open to fraud?

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