Originally published in Progress in Lending on September 1, 2021
It seems like we’ve been talking about cyberfraud risk mitigation and dealing with cyberfraud in the home finance industry for decades. Despite all of the time we’ve spent hardening our systems and protecting our borrowers’ sensitive financial information, cyberfraud hasn’t gone away. Based on every credible source, it’s a problem that continues to grow unchecked.
The other thing that keeps growing is the cost of guarding against it.
Financial institutions paid $219.3 billion in 2020 to guard against financial crimes. That’s an increase of over $30 billion from 2019, according to published reports.
Are these investments solving the problem? Not according to Corporate Finance Institute, a national training firm that teaches fraud risk mitigation, which estimated that losses from identity theft in the United States alone totaled nearly $2 billion in 2019. California, with over 73,000 cases of identity theft reported, was the state whose citizens suffered the most from the crime – Florida was a very distant second with 37,000 reported cases, the company reports.
So, what’s the problem? Why can’t we put a lid on cyberfraud in home finance? Identifying this problem is the first step in solving it. I can tell you three places you won’t find the answer.
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