The Nilson Report

Issue 1152 | Apr 2019


Companies featured in this issue include:

Latin America Market Shares of Purchase Volume

Latin America Market Shares of Purchase Transactions by Brand

Market Shares of Purchase Transactions in Latin America 

Latin America General Purpose Cards 2018

Second 50 Largest Debit Card Issuers in the U.S.—2018

Latin America General Purpose Cards 2018

Purchase transactions generated by global brand credit and debit cards issued in Latin America and the Caribbean region reached 22.83 billion in 2018, an increase of 12.8%.

1. Visa
13.10 billion transactions, +8.4%
2. Mastercard
9.08 billion transactions, +20.0%
3. American Express
0.56 billion transactions, +12.7%
4. Diners Club
0.09 billion transactions, +9.9%

Full access to the Latin America General Purpose Cards 2018 results is available when you subscribe to The Nilson Report.

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SentiLink Fights Synthetic Fraud

When an application for credit involves a name, date of birth (DOB), and Social Security number (SSN) that do not belong to the same person, or that are completely false and have been assembled to create a fictitious identity, synthetic identity fraud is being attempted. When the name and date of birth match those of a real person, but the Social Security number belongs to another person or is made up, the applicant is attempting fraud in their own name. That is first-party synthetic fraud. When the name, DOB, and SSN are completely false, third-party synthetic fraud is being attempted. 

First-party synthetic fraudsters know their credit scores are so bad they won’t get loans, so they resort to synthetic fraud to beat the system. Automobile loan providers, credit card issuers, and personal loan lenders suffer the losses.

Third-party synthetic fraud is even more expensive for those same lenders because it is done at scale by organized crime gangs. In the U.S., those gangs are concentrated in Southern California, Atlanta, Houston, and South Florida. 

Organized criminals take their time—from 6 to 24 months. They apply to open new accounts knowing they will not succeed because their fictitious identity has no prior credit history. However, simply attempting and being rejected for credit begins a file at a credit bureau. After a few failed application attempts, the fictitious identity obtains a measure of legitimacy simply by way of its growing file at a bureau. 

It is common for those criminals to establish a credit history by opening a secured credit card account in which they put funds on deposit at the issuer and receive a line of credit equal to that amount of money or by obtaining a low-credit-limit ($300 to $500) unsecured entry-level credit card. They make regular payments on the card balance. Their good status is reported to the credit bureaus. In time, they graduate to prime and superprime status with multiple accounts. They make regular payments, ask for credit line increases, and when they are ready, they “bust-out”—spending all available credit. They leave multiple lenders with tens of thousands or hundreds of thousands of dollars in losses. 

SentiLink provides lenders a score of the likelihood of first-party or third-party synthetic fraud. Lenders use an API to send SentiLink the name, DOB, SSN, phone number, and email address on an application. It returns a score within 300 milliseconds. 

SentiLink’s technology can be used by lenders (credit card, fintech, alternative) of any size. The company demonstrates its technology in proof-of-concept (POC) tests. 

POC involves a review of three months of data. At rollout of the SentiLink system, synthetic applications are rejected in real time or suspicious applications are referred to a lender’s back office for manual review. The company’s technology can identify first- or third-party fraud. 

SentiLink is building the credit industry’s first identity bureau. The goal is to give lenders a speedier way to detect any kind of fraud, not only synthetic. Currently, lenders identify fraud events within their own systems but that information is not shared with other lenders. SentiLink has created a black list of synthetic fraud identities with more than 100,000 names. It wants to help all lenders identify contact information, device information, and other information used by criminals. Credit bureaus share repayment information among lenders. SentiLink wants to share authentication experiences. 

Naftali Harris is Co-Founder at SentiLink in San Francisco, California,,

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