A new Point Predictive tool allows auto lenders to automatically reject an applicant because of the likelihood of fraud or set interest rates to reflect that risk, according to the company. Paired with a new capability to handle inquiries from denied customers, the new system is compliant with federal law, Point Predictive said.
The AutoPass system announced last summer increases the pool of loan applications that can be “auto-decisioned” — approved or rejected immediately by a lender’s software without human review. This gives a dealership and customer a speedier answer.
Point Predictive’s earlier Auto Fraud Manager screening system featured software that alerted lenders to potential fraudsters, but only allowed them to deal with suspicious applicants in a “semiautomated fashion,” according to Point Predictive Chief Fraud Strategist Frank McKenna. The bank would have to ask the customer for documentation and then base an approval or denial based on that, he said.
“They can’t decline a consumer outright,” McKenna said.
Basing a decision on the software’s modeling would leave a lender out of compliance with the law, he said. But the additional work required for compliance means a lender could be wasting time and resources on an applicant it views as probably running a scam.
McKenna said the new AutoPass tool allows a lender to skip this step, save “quite a bit” of expense and automate the application.
The new system expands Point Predictive’s role in the process when a loan…
