Review of Managerial Science

, Volume 8, Issue 1, pp 89–119

What factors drive personal loan fraud? Evidence from Germany

Original Paper

DOI: 10.1007/s11846-012-0096-7

Cite this article as:
Dorfleitner, G. & Jahnes, H. Rev Manag Sci (2014) 8: 89. doi:10.1007/s11846-012-0096-7
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Abstract

Based on a data set of nearly 43,000 personal loan applications from Germany, this paper empirically determines key factors of application fraud such as, for instance, the sales channel or the loan amount. This is done univariately as well as by employing a logistic regression, which is found to be a statistically significant approach for profiling loan application fraudsters. Besides in-sample and out-of-sample verifications, we also prove the economic significance of our results by developing a fraud management framework taking the fraud rate, the average default cost due to fraud as well as the fraud screening costs into account.

Keywords

Personal loan fraudLogistic regressionFraud management

JEL Classification

G21D14K14

Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  1. 1.University of RegensburgRegensburgGermany
  2. 2.BonnGermany