The advent of technology has forced companies to advance consumer data protections. This is true across nearly all industries, including the alternative finance
sector. Lenders, because they are privy to the financial information of customers, must take extra measures to prevent a data breach. Recent identity theft provides example
A recently discovered crime ring in Madison, Wisconsin, could provide a cautionary tale for lenders to use as an example of what not to do. The Wisconsin State Journal reported six individuals were recently arrested and charged with fraud after taking out fraudulent loans from a short term lender. The source explained former store employee Rashaad Sanders, as well as five company clients are facing charges including identity theft and fraud against a financial institution. Sanders allegedly gave out loans to people, knowing they were presenting false information, costing PLS Short term Loans $46,000 through 19 loans. Because short term lending
businesses allow employees to access consumer data, owners have a responsibility to make sure their workers are upstanding citizens, or they risk losing client information. There are a number of tools, like Microbilt's OFAC Watchlist and Red Flag solutions, which can compare staff member data to verify provided information and run them against national lists. Most lenders go to great measures
Because news of multiple hackings and identity thefts schemes have been in the news lately, lenders should consider sharing with customers some of the preemptive measures they have in place to assure client data cannot be accessed in the event of an information disaster. This could serve to reassure individuals that they are making the correct decision when it comes to lending needs and restore faith in the sector. Many lending veterans believe the industry goes to great lengths to assure the protection of company and consumer data. Bloomberg Businessweek reported many believe suggested government intervention in regulations is not needed. For example, CEO of Selling Source Dave Baker told the source the industry is largely self-regulating, and firms just have to make sure those buying leads and complaining consumers are legitimate to ensure safety. Others also believe the industry is safe and takes best practices to protect the financial data of clients. The spokesman for Montel Williams, the former talk show host and advertiser for MoneyMutual, indicated to Bloomberg Businessweek the celebrity chose to market for the company because of the firm and the industry's stellar record of conduct.