Magazine article American Banker

2 to Use eFunds Service to Assess Applicant History

Magazine article American Banker

2 to Use eFunds Service to Assess Applicant History

Article excerpt

Two large banking companies have agreed to use a risk assessment scoring service from eFunds Corp. that counts how often potential customers open and close accounts at other financial companies.

U.S. Bancorp and National City Corp. have agreed to use eFunds' QualiFile service to determine fraud risk when people open or apply for accounts, the Scottsdale, Ariz., company said Tuesday. Both banking companies are using an older eFunds service, New Account Chex; both services are offered through the company's Chex Systems Inc.

QualiFile creates a risk score by assessing how many accounts a potential customer has opened or closed, how often the customer orders checks, and how often the customer's checks bounce. The company uses data collected by eFunds' debit bureau, which collects information from banks and merchants.

"If people are ordering a lot of checks in a short period of time, that can indicate fraud," Martin Romain, eFunds' vice president of risk products, said Tuesday.

Trent Spurgeon, the vice president of consumer products at U.S. Bank, said QualiFile can provide valuable information about new customers.

"When we have a customer new to the bank that we have no previous experience with, it's difficult to know what account-level privileges to assign them until we know them better," he said. "This allows us to move that process up sooner."

Jeffrey C. Kastelic, a senior vice president of retail products for National City, said that its previous account-opening process was "a little bit behind the times in the up-front decision process." That process used New Account Chex, which looks at the same data as QualiFile but does not generate a risk score.

"We were declining far too many applicants, because we had a fairly simplistic decision model," Mr. Kastelic said.

Since it started using QualiFile in August, the Cleveland company has been able "to approve a lot more deposit accounts and new households than we were before," he said. …

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