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E-Lenders: Hackers New Favorite Targets

By Alisdair Faulkner, Chief Product Officer, ThreatMetrix



Over the past few years, online and peer-to-peer lending have emerged as popular financial
options.

Industry pioneer Lending Club reported over $24 billion in loans issued as of 2016, and since
2007, small business e-lender OnDeck has lent more than $825 million.

Given the proliferation of all things digital, this new online lending trend shows no signs of
slowing down, and it’s already resulted in greater financial inclusion for unbanked and/or
underbanked consumers, as well as an increase in new account creation transactions.


Common Attack Vectors

At the same time, though, the business of online lending is evolving, with rising interest rates,
stricter regulations and increasing competition from traditional banks creating pressure on
profitability.

Even more troubling for the industry is the growing number of cyberattacks. ThreatMetrix
conducted research on actual incidents of cybercrime from July through September 2016 and
found new loan application fraud higher than ever before.

Cybercriminals are viewing e-lenders as easier targets than larger, more established banks,
which has lead to a surge in the buying, trading, augmenting and monetization of stolen identity
credentials.

Loan stacking (i.e. when a consumer takes out multiple loans without a lender’s knowledge) has
emerged as another common attack vector amongst online lending-focused cybercriminals, as
hackers can capitalize on time delays inherent in reporting loan agreements to credit bureaus.
Stolen identity credentials and device spoofing techniques allow cybercriminals to bypass even
complex application procedures, and bots have proved invaluable for the mass testing of
credentials and the infiltration of trusted user accounts.


The Critical Dilemma

The acute challenge for e-lenders is that stolen identity profiles are becoming increasingly
indistinguishable from authentic profiles, because they’re created using a plethora of stolen data
and resemble near-blueprints of the real thing.






97 Cyber Warnings E-Magazine – April 2017 Edition
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