Innovation in Fighting Financial Fees and Fraud

February 9, 2011 By Aminda

Coming out of a recession, nobody wants to pay more than they have to for anything. But it happens and unfortunately, often unknowingly, consumers pay too much; in the form of hidden fees, excessively high loan rates and many other tactics. Credit card fraud is a global problem, estimated to cost upwards of $500 million in the U.S. and £535 million in the UK.A couple of recent initiatives are harnessing the power of the crowd to cut down on financial fraud. In the U.S., the newly created Consumer Financial Protection Bureau has set up a web platform allowing users to submit ideas, complaints and feedback.

The agency’s initial focus is on payday lenders and check-cashing shops – businesses that provide short term, high-interest loans. The goal is to make public those businesses that use tactics such as preying on at-risk populations and altering loan terms to avoid falling under government regulation, subsequently charging interest rates upwards of 35%. The worst of these operations will set up shop in a neighborhood for a few weeks then disappear. The goal is to weed out the shady operations and reward those who provide excellent products and services.

In the private sector, Billguard.com – currently undergoing alpha testing – is a new service that uses a variety of methods to protect credit card holders from expenses such as hidden fees and duplicate fees, both fraudulent and not. The service does so by alerting users via email when a shared charge on a bill is flagged by another user of the service. Additionally, the proprietary software monitors the web for credit card complaints and analyzes bank transactions.

Do you have an innovative solution for dealing with financial fraud? Why not share it in a problem solving workspace on IdeaConnection: where users can post ideas on tackling bank fraud, credit card fraud or investment fraud and read tips from others.


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