2024-09-30 Fraud, not as intention to misuse the data

Fraud in lending does not always have to be connected to people stealing the IDs or personal information. It is also connected to consumers that lend the money with no willigness to pay it back. Thst willingness might be initial or changing in time as they keep lending money.

I identify following things inflencing the willingness and amount of protection people build in lending:

a) willingness decrease due to financial situation that change rapidly to bad to be good again

b) willingness decrease due to advise by friend, attorney or any 2nd party connected to consumer

c) willingness decrease due to advice on social media

d) willingness decrease due to intiention to screw the world, as consumer had been screwed

e) willingness decrease due to secondary cash-flow issues

f) willingness decrease due to bad quality of underlying asset or mistreatment of the underlying asset

g) willingness decrease due to bad insurance policy or insurance making additional issues to be claimed

h) willingness decrease due to misunderstanding of the loan position by family members in the process of probste

i) willingness decrease due to disputes and other action done by consumer to avoid responsibility 

k) willingness decrease due to external position of the consumer and his disrespect to financial institution

All a)...k) can be identified and dealt differently. They are also important once the case is presented to the legal action, if mecesarry. It is not always to approach the consumer with force, as many of those situations are easy to be resolved in respectful manner.

If a financial institution has a tool to identify on which stage the consumer is and starts to pro-actively educate the consumer we have a great way how to decrease the amount of BK, amount of NPL, manage cash-flow amd liquidity of financial institutions or even improve financial system as whole.