During times of financial emergencies, fintech service providers such as online lenders serve as an important lifeline for consumers who are unable to access credit from more traditional sources like banks and credit cards. As leaders and innovators in the fintech space, it is incumbent on all involved to be vigilant and help identify fraudsters seeking to exploit consumers.
Bad actors in every industry cause harm for the entities that are playing by the rules. The online lending industry is providing a valuable service, but bad actors in the industry give everyone a bad rap. As a fintech entrepreneur, I have called for and continue to support sensible regulations that allow the good actors to serve their customers while emphasizing the importance for all of us to seek out and stop these bad actors.
Recently, I led the initiative to launch ReformOnlineLending.org, which provides a place for employees in the industry to report bad actors or business practices they have witnessed. By visiting the website, visitors can submit information which we provide directly to federal regulators or law enforcement for investigation.
Recently, the Los Angeles Times spotlighted the work of the Online Lenders Alliance (OLA) to prevent fraud.
LINK TO THE STORY:
The LA Times reported that:
OLA hired an outside firm to build a program that will search the Web for sites using the term “no credit check.” The group is now picking out sites that are controlled by lenders or loan advertisers and asking them to take down any “no credit check” claims and fix other problems.
OLA Chief Executive Lisa McGreevy said the group has done similar monitoring work before, but only manually – typing various terms into Web searches, browsing sites and looking for misleading language or other bad practices.This is the first time that the group has tried a more systematic approach.
“We’re trying to be the cop on the beat,” McGreevy said. “We’re not interested in having bad actors or people who do fraudulent business giving our good lenders a bad name.”
I applaud the efforts of OLA and others who are helping to systematically eliminate fraudsters and scammers who target consumers.
Government regulators and consumer groups should recognize these efforts and understand that legitimate businesses, especially those in highly regulated industries, often place a greater emphasis on customer service. This is one of the reasons the Consumer Financial Protection Bureau’s own complaint database receives so few complaints from customers who use online lending services, while more traditional financial institutions like banks and credit card companies receive some of the highest.
No matter what industry you are in, when fraudsters strike, it gives the whole industry a black eye. Government regulators play an important role in ensuring the financial marketplace is safe for consumers; however, state and federal regulators should not ignore or dismiss the great work the industry is doing to root out fraud and provide a better and safer borrowing experience for customers.