Northteq released a comprehensive new whitepaper, “Identity Verification in Equipment Finance: Why Your Process is Broken (And How to Fix It).” The report highlights a critical shift in the fraud landscape, revealing that manual verification processes are no longer sufficient to combat increasingly sophisticated and “patient” fraudsters.
According to the whitepaper, the financial impact of fraud is accelerating. Every dollar lost to fraud now costs lenders $4.00 in total impact, a significant increase from $3.64 just four years ago. Furthermore, synthetic identity fraud, a method in which criminals combine real and fake information to create new identities, is projected to cost U.S. lenders $2.4 billion annually by 2027.
The Rise of the “Patient” Fraudster
One of the most striking insights in the report is the changing behavior of bad actors. Northteq notes that fraudsters are becoming increasingly patient, often making several months of legitimate payments on an equipment lease to build credibility and “age” the account before eventually disappearing with the assets.
“If you’re still manually looking up business entities on Secretary of State websites, you’re losing money, missing fraud, and frustrating your vendors,” the report states. “Lenders who embed automated identity verification early in their workflow are returning credit decisions in minutes instead of days.”
Key Findings:
- A Lack of Visibility: While 47% of commercial lenders report fraud losses between 1 and 10 basis points, 10% of lenders admit they do not actually know what fraud is costing their organization.
- The Cost of Inaction: Beyond direct losses, manual processes lead to operational waste, duplicate credit pulls and lost deals to faster-moving competitors.
- Expert Insights: Developed in partnership with Middesk, the whitepaper includes perspectives from real lenders and operators who have successfully overhauled their verification workflows.
The paper argues that the solution lies in moving away from reactive, manual “check-the-box” exercises toward automated, data-driven identity systems that can verify beneficial ownership and business legitimacy in real-time.
How to Access the Report
The full whitepaper, featuring detailed data on fraud trends and actionable steps for building a modern verification process, is available for download now.