Fall is in the air, and ‘tis the season for tricks, treats and things that go bump in the night.
Businesses provide a great disguise for fraudsters because it’s relatively easy to create shell businesses or to take over the identity of a dormant corporation. Consumer authentication tools (which have historically been more sophisticated than their commercial counterparts) are sometimes used to screen proprietors to ferret out small business fraud. While these tools may verify the applicant is using a valid consumer identity, they are unable to identify risk factors associated with the proprietor’s current and past businesses.
Fortunately, new tools are now available that screen proprietors for potential fraud while providing insights into risks associated with their current and previous businesses. These tools not only verify that the proprietor is related to the business and identify application irregularities, but are also helpful in identifying principals who have been associated with multiple businesses or poor financial performance, which may indicate hidden risks are lurking in your portfolio. Without these insights, the skeletons hiding in your guarantor’s past and present business relationships may hold some scary surprises for you.