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Chris Salese

For the record, this column has absolutely nothing to do with the upcoming presidential election. I wanted to make that clear before you read any further.

Instead, it’s focused on the faceless crimes that continue to disrupt our daily lives.

Unfortunately for many of you, I’m sure the impact of a fraudulent banking scheme or a carefully orchestrated cyber-hack does more than just cause a disruption.

Whether it’s the Wells Fargo sales scandal or the DDOS (distributed denial of service) attacks that took down such sites as Twitter and Netflix, it’s obvious these types of criminal activities aren’t going away anytime soon.

In order to protect against Mr. Fraud and Mrs. Hack or vice versa from reaching your accounts, your lender is being forced to invest a tremendous amount of time and money to stay ahead of these “bad people.”

For instance, cyber-security is now one of the largest current operating expenses for lenders these days.

Although cyber-security is certainly nothing new, the size and the scale of today’s efforts is unprecedented, according to leading Internet and data security firms.

The problem here is at what point will you pay for this added defense by your lender.

Of course, there is no file that can truly ever be completely safe, but the cost for protection for your lender will continue to rise and eventually be passed along to you in the form of higher fees.

I guess this is less expensive than the alternative, yet either way it stinks for consumers. It really is inevitable that consumers will in some way bear this increased security cost and is no different than the added compliance expenses your lender has already incurred due to the regulatory changes in the mortgage industry.

As an example, it is expected by your lender’s customers, investors and partners that your lender maintains the highest level of vigilance in the prevention of fraud at all points in the loan process.

Therefore, your lender must have a detailed policy in place to identify fraud, the actions taken to report it and stop it along with best practices to create a culture in which fraud incidences are prevented. Your lender needs to have a zero tolerance for loan fraud.

Similar to cyber-security, fraud prevention has been around for a long time.

However, the policies your lender has in place for each and how they are both policed, seem to vary from one bank to the next. The good news is that we are seeing some improvements in these areas, despite the recent headline news.

In addition, it’s important for consumers to realize that just like the security of your data never being totally safe, neither is the illusion that any bank is completely free of fraudulent practices. Sadly, this is the reality.

So as long as we know that even horses and stagecoaches can be guided by a Mr. Fraud or Mrs. Hack, that’s the first step in helping to identify and fix these major problems.

Chris Salese can be reached at or 707-363-4439.