Financing

TransUnion acquires FactorTrust

CHICAGO - 

The company that deemed itself an alternative credit bureau now is a part of what traditionally has been one of the Big 3 credit history providers.

Late on Tuesday, TransUnion announced the acquisition of sponsor FactorTrust, a provider of alternative credit data, analytics and risk scoring information that can empower auto finance companies and other lenders to make more informed decisions while possibly increasing financial inclusion to a wider population of consumers.

The acquisition closed on Tuesday, and financial terms were not disclosed, according to a news release shared by TransUnion.

TransUnion highlighted the acquisition reinforces the company’s position as a provider of consumer reporting models that capture a wide range of positive payment behaviors.

Officials mentioned the addition of FactorTrust’s short-term and small dollar lending data to TransUnion’s suite of credit solutions gives lenders the information they need to offer responsible borrowers a broader range of credit products, supported by TransUnion’s robust data security, technology and customer service infrastructure.

The companies explained short-term and other small dollar loans are the largest category of consumer credit obligations not currently part of nationwide credit reporting agency databases. In many cases, historically underbanked consumers have selected short-term loans because an insufficient credit history left them with few options.

Officials went on to point out the breadth of data offered through TransUnion’s purchase of FactorTrust will provide finance companies and other lenders with a more comprehensive view of consumers’ financial obligations and payment performance, expanding consumer choice.

“Access to credit is the building block of a strong American middle-class economy,” said Jim Peck, TransUnion’s president and chief executive officer. “With the acquisition of FactorTrust, we will be able to capture a wider variety of positive data that can be a stepping stone to building consumers’ credit profiles, helping people access credit and, ultimately, improve their standard of living.”

TransUnion leadership also highlighted that adding small dollar loan data to its credit reporting framework also positions the company to help customers streamline compliance with the Consumer Financial Protection Bureau’s new small dollar lending rule. The rule is designed to protect consumers from securing short-term and balloon-payment loans without the ability to repay according to the terms of the agreement.

With visibility into consumers’ traditional and alternative credit obligations, TransUnion contends that it will be able to provide all of the data lenders need to comply.

Meanwhile, the acquisition continues what has been a robust couple of years for FactorTrust.

Back in November 2015, FactorTrust closed on a $42 million investment led by ABS Capital Partners, a late-stage growth company investor, and MissionOG, an early to growth stage investor. Since that financial resource injection, FactorTrust added a former top official at the CFPB to its board of directors and made multiple appearances on the Inc. 5000 list that recognizes growth.

And now, FactorTrust is a part of TransUnion.

“Joining TransUnion is a great match for FactorTrust,” FactorTrust CEO Greg Rable said. “We share a commitment to serving consumers and customers with the highest ethical and compliance standards.

“Our products complement TransUnion’s slate of online and batch solutions, and our combined data will expand options for consumers and lenders,” Rable went on to say.

Now with FactorTrust as a part of its portfolio, TransUnion reiterated how the acquisition reinforces the company’s long history of market innovations that promote financial inclusion.

A pioneer in trended data, TransUnion believes its CreditVision Link Scores are the only scores in the market that combine directional trended data and alternative credit data, such as payment history and small dollar lending. CreditVision Link Scores allow lenders to score more than 60 million more people versus traditional models, and are proven to accurately score more than 90 percent of applicants typically returned as no-hit or thin-file.

FactorTrust’s short-term and small dollar loan data extends this inclusiveness.

“FactorTrust is a strong addition to TransUnion’s business,” said Steve Chaouki, executive vice president of TransUnion’s financial services business unit. “FactorTrust’s approach to complete tradeline reporting aligns with TransUnion’s business model, and the inclusion of more alternative data in financial institutions’ credit and underwriting decisions will enable our customers to better segment risk, allowing them to serve a broader set of customers across the credit spectrum.”


Traffic Control CRM upgrades tool to handle ‘We Owe’ and other F&I fulfillments

DELAND, Fla. - 

Traffic Control, a solution for dealers retailing 50 to 150 vehicles a month, this week announced new features for improving multiple F&I-related steps to enhance deal cash flow, employee efficiency and customer satisfaction.

Traffic Control CRM now features e-document technology integrated with RouteOne to pull finance company stipulations so F&I can prepare and submit to lenders all required deal paperwork first time for faster contract decisioning and deal funding.

For most dealers, about half of all deals will require finance company stipulations. Traffic Control CRM now can ensure that F&I managers know what finance company stips for a deal will require, from proof of residency and employment to a marital separation decree and more, so clean deals are presented first time.

“The days of chasing contracts to get deals funded — of risking customer retention because of conflicts over ‘We Owe’ promises, and seeing customer zeal wane as F&I managers go in and out to photocopy and scan deal jacket items, is over,” said Brendan Hurley, co-founder of Traffic Control CRM, and owner/operator of Hurley Chrysler, Jeep, Dodge and RAM.

“F&I means more than finance and insurance, it also stands for finish it, because the dealer doesn’t get his or her money if the deal’s not done,” Hurley continued. “As one dealer told me recently, ‘I’m lost in a sea of paperwork, and none of it is money.’ Enhanced Traffic Control CRM reduces the paperwork clutter and delay and turns it into more money.”

Ending that “sea of paperwork” also includes capturing We Owe’s electronically, with customer signature attached, so these promises are instantly accessible by and available to service advisors or any authorized individual to review.

“If our dealership is like others, you’re writing We Owe’s on most every deal, documenting something we owe the customer or they owe us toward the deal. Any time there are questions or lack of clarity about those promises we risk tanking customer satisfaction. Traffic Control CRM now eliminates that confusion and delay,” Hurley said.

Traffic Control’s new e-Doc feature can create digital deal jackets populated with:

• Contract
• We Owe
• Lien release
• Buyers order
• Aftermarket product purchases
• Vehicle title
• Drivers’ license and vehicle registrations
• Insurance card
• Actual cash value statement
• Down payment
• Hold check

Traffic Control CRM also provides customers with digital copies of their completed deal jacket on thumb drive, via email, and via text link to a secure microsite.

These features are for a short time a complimentary upgrade to Traffic Control CRM users. For more information, Mike Donaldson at [email protected] or (888) 992-4588.


Credit Acceptance responds to accounting and salesforce questions

SOUTHFIELD, Mich. - 

Beyond its originations and collections activities, Wall Street observers questioned Credit Acceptance Corp. leadership about two specific operational areas when executives discussed their third-quarter results.

Investment analysts wanted to know about Credit Acceptance’s strategy for adding to its sales force to enhance its active dealer network, which stood at 7,737 dealerships at the close of Q3 on Sept. 30. That figure climbed by 946 new active dealers; stores that originate at least one contract with the subprime auto finance company during a quarter.

Another conference call participant also wondered how Credit Acceptance is bracing for upcoming changes in accounting regarding the allowance for losses. Last summer, the Financial Accounting Standards Board (FASB) issued an accounting standards update the organization explained was designed to improve financial reporting by requiring timelier recording of credit losses on loans held by financial institutions and other organizations.

What triggered a longer discussion was the salesforce dialogue between call participants and Credit Acceptance chief executive officer Brett Roberts, who shared that the company’s team to generate dealer activity is 30 percent larger now than it was a year ago. While the number of active dealers is higher, analysts questioned the productivity of the sales team since origination volume per active dealer softened by 9.7 percent year-over-year in the third quarter, resulting in Credit Acceptance’s total origination volume dipping by 4.7 percent to 78,589 contracts.

“As we talked about last time, it’s a longer-term play for us to increase the sales force,” Roberts said. “We don’t necessarily expect it to have any impact this year.

“If you go back and look at our history, the last time we increased the size of our sales force, it took us about two years to roughly double the sales force and then approximately three years after that before productivity got back to where it was when we started the expansion,” he continued. “So you’re looking at kind of a five-year process from start to finish. We’re not trying to double it this time, but we are increasing its size significantly, and we expect that’s something that will play out longer term.”

The analyst continued by asking when Credit Acceptance was making a play to carve out more origination volume through franchised dealerships along with its independent store footprint in hopes of driving the active dealer network to the 10,000 mark and beyond.

“We’re reluctant to sort of give you a stated goal long term that this is how big we’re going to get. I mean we’re obviously trying to get as big as we’re capable of getting, and we think adding to the sales force helps us do that,” Roberts said while acknowledging that the largest portion of Credit Acceptance’s originations came from franchised stores, “what we call national accounts, which are the kind of the largest dealer groups in the country."

He continued by adding, “We allow independents to write purchased loans if they’ve closed a pool of 100 loans on our portfolio program. So once we have some experience with an independent, if that’s positive, we’ll allow them to access the other program. And then there’s a limited number of independents that are allowed to write purchased loans from the beginning. Those are independents that we view as kind of quasi-franchise dealers, working to distinguish them from the traditional independents, and we’ve allowed them to write purchased loans as well. But most of it is franchise dealers and the larger national accounts.”

Later in the call, the topic turned to accounting as analysts inquired about how much the modified mandates for reserving for losses was going to impact Credit Acceptance’s financial standing and what preparations the company is already making for the changes to that go into effect in 2020.

“As we’ve talked about on prior calls, we’ve begun our assessment on that,” Credit Acceptance senior vice president and treasurer Doug Busk said. “The guidance is extensive and it’s complicated, and it’s not effective until 2020. Having said that, we’re making good progress. We’re working with our auditors on it. So when we know more, we’ll talk about it. But at this point, we haven’t finished quantifying the impact it will have on our financial statements."

Top-line results

Credit Acceptance reported Q3 consolidated net income of $100.7 million, or $5.19 per diluted share, compared to consolidated net income of $85.9 million, or $4.21 per diluted share, for the same period in 2016.

For the nine-month span that ended Sept. 30, the company’s consolidated net income came in at $293.1 million, or $14.99 per diluted share, compared to consolidated net income of $245.2 million, or $12.01 per diluted share, for the same timeframe a year ago.

As mentioned previously, Credit Acceptance noted its unit and dollar origination volumes declined 4.7 percent and 0.5 percent, respectively, during the third quarter. The number of active dealers grew 5.7 percent while average volume per active dealer declined 9.7 percent.

“Dollar volume declined slower than unit volume during the third quarter of 2017 due to an increase in the average advance paid per unit,” the company said. “This increase was the result of an increase in the average size of the consumer loans assigned primarily due to an increase in the average vehicle selling price and an increase in purchased loans as a percentage of total unit volume, partially offset by a decrease in the average advance rate due to a decrease in the average initial forecast of the consumer loans assigned.

“For three out of the four most recent quarters, unit volumes declined as compared to the same periods of the prior year,” Credit Acceptance continued. “This trend reflects the difficulty of growing the number of active dealers fast enough to offset the impact of the competitive environment on attrition and per dealer volumes.

“In addition, in response to the decline in forecasted collection rates experienced in 2016, we adjusted our initial collection forecasts downward during 2016. While the adjustments have been modest, we believe these adjustments have had an adverse impact on unit volumes,” the company went on to say.

Credit Acceptance named to The Detroit Free Press 2017 Top Workplaces List

In other company news, Credit Acceptance has been selected as a 2017 Top Workplace by The Detroit Free Press.

Credit Acceptance was named the No. 2 workplace in the large company category. This is the sixth year in a row that Credit Acceptance has won a Detroit Free Press Top Workplace honor.

“Credit Acceptance was selected from among hundreds of companies vying for a place on the list,” the company said. “Our ranking was based solely on the results of a team member survey administered by Energage, LLC (formerly WorkplaceDynamics), a leading research firm that specializes in organizational health and workplace improvement.

“Several aspects of our workplace culture were measured, including alignment, execution, and connection, just to name a few,” Credit Acceptance added.


Balancing the risk versus rewards of financing to millennials

DALLAS - 

Millennials — those individuals born between 1980 and 1994 — currently represent 25 percent of the total buying power in the U.S., according to a recent study by TransUnion. They also control a large chunk of liquid assets, an amount that is forecast to grow to $7 trillion by 2020. By 2025, they are expected to generate 46 percent of all U.S. income.

While this generation’s buying power is increasing, they have much different challenges than previous generations, especially when it comes to student debt. Outstanding student loan debt stands at $1.31 trillion. Millennials also earn less than previous generations. The average worker in the 24-36 age group earns $10,000 less than their parents' generation did at the same age, which is roughly 20-percent less purchasing power.

In the retail automotive space, 20 percent more millennials are open auto loans and leases than Generation X, and they are on track to outpace Baby Boomers by 2020. According to the TransUnion research, the growth opportunity is clear.

So, how can auto finance companies capture more of this growing — yet challenging — demographic? If lenders are going to bring these millennials into the fold, they’re going to have to meet them halfway.

Balancing risk versus reward

Increased debt means more risk for the finance company. According to TransUnion, there are more non-prime millennials (59 percent) than Gen X (54 percent), representing a larger risk. However, millennials are opening auto loans and leases at a rate 2 percent to 3 percent higher than Gen X. So, how do you balance the risk versus reward?

One strategic way of appealing to this generation while also protecting your auto loan portfolio from risk is to structure your auto loans with complimentary F&I products, like a vehicle service contract (VSC) or vehicle return protection. These products protect consumers from unforeseen circumstances that can negatively affect their ability to make their car or house payments.

For example, a VSC gives consumers more control over their monthly budget by taking care of unexpected expenses related to a vehicle breakdown. Meanwhile, Vehicle Return protection offers consumers a safety net to relieve their lease or loan obligation when unforeseen life events occur, like:

• Involuntary unemployment

• Physical or mental disability

• Critical illness

Beyond reducing risk, offering consumer protection products on your contracts allows you more control on compliant product pricing and gives you a driving differentiator with your dealership clients as they work to increase their relevance with millennials.

Meeting them halfway

This is the first completely digital generation, living almost entirely on their smartphones. According to First Data, many millennials would never think of entering a bank branch to take care of their financial needs. More than a fifth of all millennials have never even written a physical check to pay a bill.

This generation also came of age during the Great Recession and it impacted their view of credit and risk. According to TransUnion, millennials prefer to use a debit card as their primary means of payment. If they use a credit card, they carry much lower balances than their counterparts in Gen X. As stated earlier, Millennials do use credit in order to meet their transportation goals.

How can you capture this lucrative market? These five tips can help.

• Be accessible in real-time all the time. Realize that Millennials are researching their vehicle purchases online — independent of dealer input. Make sure you have financing calculators easily accessible. Better yet — consider live online chat functions.

• Communicate on their terms. Millennials rely on their smartphones. Use text, Twitter or email to reach them. 

• Demonstrate innovation. Relying on brick and mortar to capture the Millennial will miss the mark. Not ready to put everything online? Demonstrate a willingness to interact digitally and you’ll empower your future customer.

• Be a partner. Often this is the millennial’s first car purchase — and it can be a scary proposition. Work with them to find a solution that is mutually satisfactory. Offer — and explain — consumer protection products that will insulate your portfolio and keep them on the road.

• Embrace change.  Face it. Successfully working with this generation will require change on the lender’s part. Their size and buying power make it unavoidable. But the more successful you are embracing that change will translate into greater Millennial market share. In addition, auto dealers will want to work with you because your business will be structured to handle their increased millennial traffic.

And, while you are embracing change to meet your millennial customer halfway, understand that Generation Z is close behind. Balancing the risk versus reward of appealing to millennials isn’t rocket science. It simply takes thinking of solutions outside of the traditional lending box.

Brien Joyce is the vice president of specialty channels at EFG Companies. For more details, EFG Companies at (800) 527-1984 or .


Ally chooses former Citigroup exec to be chief strategy officer

CHARLOTTE, N.C. - 

Coinciding with the finance company’s enhanced relationship with Carvana, Ally Financial on Wednesday announced that Dinesh Chopra has joined the company as its new chief strategy officer.

In his newly created role Chopra will lead Ally’s corporate strategy team, helping to foster its growth and evolution as a leading digital financial services provider and define the elements of Ally’s future strategic plan.

Chopra joins Ally from Citigroup where he served as global head of strategy, retail bank, mortgage, fintech and digital payments responsible for leading strategic planning and improving performance for the related lines of business. While at Citigroup, he oversaw many transformation efforts, most notably developing and executing a three-year strategic plan that helped turnaround performance of the group’s U.S. retail banking business.

Prior to Citi, he held leadership positions in strategy and banking at Capital One and McKinsey & Co.

Ally has expanded and diversified its offerings over the past 18 months, adding online wealth management and home mortgage products to its robust online banking, corporate finance and auto finance products and services.

As the company continues to diversify and evolve as a leading digital financial services provider, Chopra will play a critical role in supporting and advancing these efforts. 

“I am confident Dinesh’s experience and skills are a great match for Ally as we continue to grow our business and differentiate our industry-leading products and services,” Ally Financial chief executive officer Jeffrey Brown said.

“Adding a CSO to our leadership team will enable us to better evolve our business so that we keep a leading edge in the marketplace as we grow, while also maintaining our keen focus on innovation and a great customer experience,” Brown continued.

Commenting on his new post, Chopra added, “Over the last several years I have followed Ally closely and have been impressed with the firm’s growth as a financial innovator.

“In this new role I have an incredible opportunity to work with the leadership team to push Ally’s diversification strategy forward and support our mission of providing digital solutions and services that enable our customers to achieve financial well-being,” he went on to say.


Interest rate rise in December appears likely

NEW YORK and WASHINGTON, D.C. - 

With the Federal Reserve again passing on the chance to move interest rates higher this month, S&P Global Ratings is expecting the Federal Open Market Committee to tick the target range for the federal funds rate up by 25 basis points in December.

Coinciding with the announcement of a new Fed chair coming in 2018 if approved by the Senate, S&P Global Ratings explained that policymakers could have decided to leave interest rates alone for the balance of the year.

“U.S. inflation remains subdued and, on its own, should have been enough to give the Federal Reserve reason to pause on raising rates this year,” analysts said. “Indeed, with the personal consumption expenditures deflator at just 1.3 percent year over year in September, it seems that, rather than raising rates, the Fed would use that time to monitor the impact of its balance sheet reduction — which started in October — on the economy.

“However, it appears that concerns about the risk of falling behind the curve, reinforced by favorable financial conditions and solid GDP growth, will — for most Federal Open Market Committee members — outweigh concerns about currently soft inflation, resulting in a rate hike in December,” analysts continued.

In the statement released last week after the November FOMC meeting, the Fed left rates unchanged at 1 percent to 1.25 percent. S&P Global Ratings honed in on one segment of policymakers’ latest assessment, especially when they described growth as “solid” when evaluating U.S. economic health.

“The committee will carefully monitor actual and expected inflation developments relative to its symmetric inflation goal,” the Fed said. “The committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.

“However, the actual path of the federal funds rate will depend on the economic outlook as informed by incoming data,” the Fed added.

Beyond the expectation that an interest-rate increase is coming in December, S&P Global Ratings also projected that three more rate upticks would come in 2018, consisting of 25 basis points each.

“How fast the Fed moves next year will depend on whether the softer inflation was as short-lived as it conjectured. But, if inflation does not warm, the Fed may have to acknowledge that something more persistent is to blame and will be forced to modify monetary policy accordingly,” analysts said.

Should the Senate confirm him, overseeing those decisions would be Jerome Powell as chairman of the Board of Governors of the Federal Reserve System. If approved by lawmakers, Powell’s four-year term would begin on Feb. 3.

Powell has been a member of the Fed’s top group since May 2012.

As President Trump made the announcement, the White House said in a statement, “Mr. Powell has demonstrated steady leadership, sound judgment and policy expertise. Mr. Powell will bring to the Federal Reserve a unique background of Government service and business experience.”

In accepting the nomination, Powell said, “I am both honored and humbled by this opportunity to serve our great country. If I am confirmed by the Senate, “I will do everything within my power to achieve the goals assigned to the Federal Reserve by the Congress: stable prices and maximum employment.

“In the years since the global financial crisis ended, our economy has made substantial progress toward full recovery. By many measures we are close to full employment, and inflation has gradually moved up toward our target,” Powell continued.

“Our financial system is without doubt far stronger and more resilient than it was before the crisis. Our banks have much higher capital and liquidity, are more aware of the risks they run and are better able to manage those risks,” Powell went on to say. “While post-crisis improvements in regulation and supervision have helped us to achieve these gains, I will continue to work with my colleagues to ensure that the Federal Reserve remains vigilant and prepared to respond to changes in markets and evolving risks.”

Powell would replace current chair Janet Yellen, who has been in the post since February 2014.

“I congratulate my colleague Jay Powell on his nomination to be Chairman of the Federal Reserve Board,” Yellen said.

“Jay’s long and distinguished career has been marked by dedicated public service and seriousness of purpose,” she continued. “I am confident in his deep commitment to carrying out the vital public mission of the Federal Reserve. I am committed to working with him to ensure a smooth transition.”

And with change coming at the top, the Federal Reserve Bank of New York also announced that its president and chief executive officer. William Dudley, intends to retire from his position in mid-2018 to ensure that a successor is in place well before the end of his term.

Dudley’s term ends in January 2019 when he reaches the 10-year policy limit in the role.

Dudley joined the New York Fed in 2007 as executive vice president and head of the Markets Group, where he also managed the System Open Market Account for the FOMC.

He was named the 10th president and CEO of the New York Fed on Jan. 27, 2009, taking over the remainder of his predecessor’s term. Dudley was appointed for his first full term as president and CEO in 2011 and reappointed last year.

“I have deeply appreciated Bill Dudley’s enormous contributions to the FOMC, his wise counsel and warm friendship throughout the years of the financial crisis and its aftermath,” Yellen said. “The American economy is stronger and the financial system safer because of his many thoughtful contributions. The Federal Reserve System and the country owe him a debt of gratitude.”

Dudley added, “For someone who has always had an interest in public policy and service, leading the New York Fed and being a member of the FOMC has been a dream job. I have had the honor to work at the Fed with colleagues who are amongst the most dedicated and talented public servants anywhere.”


TD Auto Finance’s top exec among AFSA award winners

WASHINGTON, D.C. - 

Andrew Stuart, president and chief executive officer of TD Auto Finance, was among three recipients of a 2017 American Financial Services Association Distinguished Service Award (DSA) during AFSA’s 101st annual meeting.

The other two executives given the association’s highest honor included Scarlett Smith, vice president of sales, banking and payments at FIS, and Rex Ellison, president and CEO of Republic Finance.

AFSA highlighted the DSA is given to individuals who have contributed significantly to industry and association growth on a national level, advanced its mission and objectives and elevated its image.

Stuart joined AFSA in 2008 while he was with Volkswagen Group as executive vice president and chief financial officer of VW Credit. It was during this time that Stuart became actively involved in AFSA and went on to serve as Vehicle Finance Division Chairman from 2012 through 2014.

He co-chaired the annual AFSA/NADA Executive Forum that brings NADA’s elected leaders together with top executives from AFSA’s vehicle finance members involved in indirect auto lending with franchise dealers. In 2014, he chaired a successful AFSA Vehicle Finance Division Conference in New Orleans.

When the Consumer Financial Protection Agency issued a bulletin taking aim at fair lending practices, the association pointed out Stuart’s leadership and recommendation to the AFSA Board led to the commission of a comprehensive study of automotive lending practices conducted by Charles River Associations.

He served as chairman of AFSA 2014-2015 and continues to serve on AFSA’s Executive Committee, Board of Directors and Vehicle Finance Board.

Based in Virginia, Stuart directs the U.S. strategy for TD Auto Finance, a business focused on providing dealerships with indirect retail and commercial products and services.

For the last three years, Smith has served as chair of the AFSA Business Partner Board and is a member of the AFSA Board of Directors.

As the sponsor of the keynote speaker for the AFSA Vehicle Finance Conference, Smith also serves on the Vehicle Finance Conference Planning Committee.

Smith is a founding member of the association’s Women’s Leadership Council and serves on the Operations and Regulatory Compliance Committee’s Business Partner Resource Group.

She was instrumental in the establishment of AFSA University that provides critical compliance training courses to member companies. The curriculum of 260 modules is powered by FIS, a global leader in financial services technology, with a focus on retail and institutional banking, payments, asset and wealth management, risk and compliance, consulting, and outsourcing solutions.

Ellison has been an active member of AFSA for many years. A strong supporter of the AFSAPAC, he started an Employee AFSAPAC program at Republic Finance.

In 2008, he served as the AFSAPAC Chair during the 25th anniversary Independents Conference in Arizona. Two years later, Ellison served as the 2010 Independent’s Section Chair. Ellison also serves on the AFSA Education Foundation Board, The EDGE Advisory Board, Operations Committee, State Government Affairs Committee and the State Traditional Installment Lending Subcommittee.

Ellison is also is the current president of the Mississippi Consumer Finance Association and president Elect of the Louisiana Finance Association. Republic Finance specializes in providing a variety of consumer loans, flexible lending options and customer service.


PointPredictive hosts roundtable to curtail auto-finance fraud

SAN DIEGO - 

The fight against fraud in auto finance continued last week.

PointPredictive held its second Auto Lending Fraud Roundtable last week in Dallas with finance companies representing 48 percent of total automotive originations in the U.S. They met to further collaborate on progressing finance companies’ fight against fraud as well as protecting consumers that can be targeted by fraudsters and potentially unscrupulous dealer employees.

“Auto lenders continue to show significant interest in reducing fraud and increasing customer protection through industry collaboration, data sharing and our consortium-based predictive technology; they are thinking of the bigger picture when it comes to fraud,” PointPredictive chief executive officer Tim Grace said.

“We have invested heavily in organizing the fraud data consortium, collaborative lender roundtables and machine-learning predictive fraud detection models,” Grace continued. “Through lender testing and validation, we demonstrated that these solutions can identify multiple sources of hidden fraud and can help lenders reduce fraud and fraud-related early payment default losses by at least 40 percent.”

To advance the fight against fraud, PointPredictive demonstrated and announced the availability of Auto Fraud Manager 2.0, a consumer application scoring tool that can increase fraud detection by leveraging improved predictive algorithms that evaluate the entire application and recent applications from individual dealers to detect all types of fraud including identity, employment, income, collateral and dealer risk.

The company highlighted that recent retrospective results using the latest Auto Fraud Manager show false positive rates of 6:1 or better for high-risk applications.

PointPredictive also released DealerTrace 2.0, an automotive dealer scoring tool that identifies dealer misrepresentation risk across the industry. DealerTrace now includes cross-industry application history and risk assessments on multiple misrepresentation dimensions for more than 50,000 automotive dealers.

In other tests recently completed with large finance companies, Auto Fraud Manger and DealerTrace were able to identify nearly 50 percent of fraud and fraud-related early payment default (EPD) losses in the riskiest 10 percent of applications.

PointPredictive highlighted Auto Fraud Manager 2.0 and DealerTrace 2.0 include significant infrastructure enhancements that were demonstrated at the roundtable meeting. They now process more than 5,000 scoring transactions per second, thereby enabling finance companies to receive a complete risk analysis and assessment of each application and dealer in a fraction of a second.

PointPredictive also demonstrated new Web-based interfaces that provide dashboard reporting, “drag and drop” functionality for file-based scoring, and interactive real-time filtering and display of risky applications and dealer activity. Leveraging an industry-wide consortium that provides solutions for all types of fraud schemes and looking at the entire consumer application and dealer application history allows lenders to better protect themselves and their consumers.

“We are providing lenders with intuitive solutions to help them better visualize and understand hidden fraud risks,” said Kathleen Waid, head of go to market at PointPredictive. “Most of the traditional third-party tools lenders use today to prevent fraud are focused on identity theft; this is only 15 percent of their total fraud problem.

Our clients are seeing unprecedented results in tests that, in many cases, span two years of historical applications. With the release of Auto Fraud Manager 2.0 and DealerTrace 2.0, lenders can begin using our solution immediately,” Waid added.

For further information on Auto Fraud Manager, DealerTrace or to join the Auto Fraud Consortium, Waid at [email protected]


GWC Warranty promotes manager to VP post

WILKES-BARRE, Pa. - 

GWC Warranty, a provider of used-vehicle service contracts and related F&I products sold through dealers, recently promoted Cynthia Bodden to the position of area vice president of sales for the company’s Mid-Atlantic region.

In her role, the company highlighted that Bodden — who was previously the GWC dealer consultant in Philadelphia and southern New Jersey — will work with GWC dealer consultants in the eastern United States to improve existing dealer partnerships and seek new opportunities to help dealers sell more vehicles by giving shoppers the confidence to become buyers.

“Cynthia’s advanced knowledge and experience of our industry coupled with an outstanding rapport with dealers made her the ideal fit to lead GWC’s Mid-Atlantic region,” GWC Warranty chief executive officer and president Rob Glander said.

“We’re confident that her addition to the talented sales leadership team already in place will put GWC Warranty in position to deliver on our best-in-class promise to more dealers than ever before,” Glander continued.

Bodden’s promotion follows more than four years of successful account management at GWC Warranty. A King’s College graduate, Bodden immediately joined GWC and fostered strong partnerships with countless dealerships in Philadelphia and southern New Jersey.

As the area vice president in the Mid-Atlantic region, GWC Warranty indicated Bodden will oversee dealer consultants and work closely with dealers in Maryland, New York, New Jersey, Ohio, Pennsylvania and West Virginia.


Sword Apak elevates exec to global sales manager

ALPHARETTA, Ga. - 

Sword Apak, which provides financial systems to the global asset finance and banking sectors, recently appointed Kris Turner to head up its expanding global sales efforts, where momentum has seen the company’s interest expand across the United States, Europe and Australia during the last three years.

The company highlighted that Turner has progressed from his previous role as senior client relationship manager within Sword Apak, bringing with him a deep understanding of the business’ technology along with a real empathy for the challenges clients are seeking to address in what are increasingly dynamic and often disruptive times.

“The capabilities of our technology are undoubted, but arguably it is our people, their passion and our agile process that has enabled us to form so many successful partnerships throughout recent years,” Sword Apak vice president of global sales Jeff Bunch said in a news release.

“Deeply immersed in our customer-driven culture, Kris is perfectly suited to his new role and has already made a positive impact on existing and prospective clients; he’s a real asset to us,” Bunch continued.

Reflecting on his newest challenges, Turner said, “I’m really enjoying the new role, listening to customers and prospects and helping them to make the most of our expertise. ‘Sales’ may be in my title, but in truth, I’m here making our solutions easier to buy, matching our technology to the challenges our customers are facing.”


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