SPECIAL ALERT: FRAUD UPDATE
The Online Lenders Alliance released the following alert to its members on December 16, 2009.
In yesterday's newsletter, we reported on a Fraud Alert that involved online transactions using an ABA /routing number that is associated with the Federal Home Loan Bank of Indianapolis. The bank itself has been notified of the problem and we are awaiting their indication of any actions they may be able to take.
Several OLA Members have reported on their efforts relating to this fraud. They are summarized below:
1. CL Verify Credit Solutions and Data X have been in communication and are determining what steps can be taken jointly to deal with this issue.
2. Leadflash has notified its customers who bought leads with this routing number.
3. Partner Weekly has blocked leads with this routing number and has notified its customers.
Please let me know if you have any information about this fraud. I can be reached at 202-669-1017 or
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FRAUD ALERT
There are several transactions that are being submitted to online lenders and ACH processors for various goods and services related to the online lending industry.
The methods of the fraud include, but are not limited to the establishment of corporate checking accounts that will accept ACH credits (the method in which they obtain funds from online lenders and service providers) utilizing an ABA/Routing Number that is associated with the FEDERAL HOME LOAN BANK, located in Indianapolis. The loan proceeds are deposited into the corporate account and when the contract amounts are attempted on the specified payment dates, they are rejected as R03 (No Account/Unable to Locate) by the Federal Home Loan Bank as they do not process ACH debit entries.
This has created issues for online lenders and has the potential to create problems for the industry as it relates to ACH processing and the Federal Home Loan Bank networks.
Online lenders and processors should be vigilant to scrub their consumer application data against industry credit reporting services as well as any ABA suppression lists that filter out these financial institutions that do not process ACH transactions. Below is the known Federal Home Loan Bank and related ABA information.
FEDERAL HOME LOAN BK
Routing Number: 074001019
Servicing FRB Number: 071000301
8250 WOODFIELD CROSSING
INDIANAPOLIS, IN 46240
(317) 465-0343
If you have any information about this fraud problem, please let me know.
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