Friday, 28 February 2014

'Cyber Criminals Behind E-extortion'

VADODARA: When you think of cyber crime, you may usually picture a hacker sneaking into networks and installing viruses designed to destroy data and computers. But cyber crime is not just about destroying computers and data for malicious purposes. Instead it is to steal information and data for financial gain.
 
This is what founder and CEO of Quick Heal Technologies Kailash Katkar said here on Saturday.
 
Katkar stressed that cyber criminals are not just making money and robbing hard-earned money of victims, their well-networked underground activities are making even the corporate sector victims.
 
"These cyber criminals work from countries which do not have strong cyber laws and are fully involved in extortion activities. They are constantly finding new ways to make money off innocent people," said Katkar, a school dropout, who created a Rs 187 crore anti-virus software business with a seed capital of Rs 15,000.
 
"In fact, our threat research and response team receives over one lakh unique virus samples on a daily basis. Just six months ago, our team used to receive nearly 75,000 unique virus samples and with the passage of time this number is expected to increase," said Katkar, who in 1985 had taken up a job at a local radio and calculator repair shop to supplement his family's income.
 
Talking about the growth of anti-virus software industry in the country, Katkar said last year, the total market was estimated at Rs 800 crore.
 
"The anti-virus software industry is expected to grow because of the penetration of smart phones. While internet is costly in India and computer penetration is still much lesser compared to the developed nations, penetration of smart phones has increased tremendously. This has led to development of security solutions for mobile devices," he said.
 
"Computers have been able to reach to only 10 per cent of our total population against 70 to 80 per cent PC penetration in developed countries. But penetration of smart phones has increased by over 100 per cent," he said.
 
'Americans can be easily hypnotized'
 
Vadodara: Americans can be easily hypnotized compared to any other population in the world. This is what world's most experienced hypnotist and world's first ever hypnotist to appear on television Andrew Newton believes.
 
"My experience suggests that Americans are the most regimented people on this planet. You can find them standing in queue everywhere and getting all kinds of permits to do small little things," said Newton adding that in contrast the Australian population is a bit aggressive and difficult to be easily hypnotized.
 
"The United States government is easily looking into emails and text message of its citizens in the name of freedom, democracy and security threat. This spying has a commercial aspect too as the same data is used for targeted election campaigns," said Newton, who has hypnotized over 60,000 people worldwide, including many famous names in the United Kingdom and abroad.
 
Newton, who has over 6,000 stage and television performances under his belt, said that in the UK like in the US, hypnotism has become a massive industry.
 
"Thirty years ago, there were just 400 hypnotists in the UK. Now, there are over 4,500 hypnotists, including those enrolled with the UK's national health scheme," said Newton, a senior lecturer in hypnosis at the Hypnoseakademiet in Norway, Europe's premier hypnosis and EFT training school.
 
"The word 'hypnosis' has always brought a sense of mystery and magic in our minds, but it is a complete science of the subconscious itself. It can't cure cancer but it is very useful for dealing with stress or combat insomnia," he said.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy : Times of India

Thursday, 27 February 2014

Low Spread Of Credit Cards, Loans In Kerala

The credit demand in the country is on the rise as the number of applicants for new loans has increased by 150 per cent in the last three years. Out of the total loans disbursed in Kerala, 82 per cent is used to purchase two wheelers, reveals the latest data trends report of Credit Information Bureau (India) Limited (CIBIL) released here on Wednesday.
 
As compared to other states, Kerala has the highest number of credit applicants who are above 45 years and 21 per cent borrowers in Kerala had a credit score of 800 and above and 40 per cent has a credit score of 750 above, the data stated.
 
CIBIL score assigned to a borrower ranges from 300 to 900. The higher an applicant’s credit score the more the likelihood of the loan application getting approved.
 
Releasing the data, CIBIL Managing Director Arun Thukral said that Kerala has 46 per cent credit seekers who are less than 35 years.
 
“The state has very low penetration of credit cards and personal loans. Banks and financial institutions today consider the CIBIL score as a crucial parameter before sanctioning any new loan. Now telecom, insurance and stock broking companies have started accessing the score,” he said.
 
He hinted that in the future the details of utility bill payments will be linked with the credit score of an individual.
 
Speaking on the occasion, Harshala Chandorkar, Senior Vice President-Consumer Relations, CIBIL said that there has been a 200% growth in consumers reaching out to us for their CIBIL report across metros as well as Tier II and Tier III cities since 2009 indicating the rising financial awareness in the country.
 
CIBIL is India’s largest credit information company that maintains information on over 317 million consumer trades and 15 million commercial trades

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy : New Indian Express

Wednesday, 26 February 2014

Secret To Financially Stable Married Life

Being married involves having a shared vision about the future. Spouses should always plan their individual, as well as joint finances. If not appropriately planned, this could take a toll on the couple's financial health. 
 
Married couples generally maintain two separate credit records and histories. Thus, both husband and wife should obtain their individual credit information reports (CIR) from a recognized credit information company and check their respective reports. Most married couples in India move from an individualistic credit outlook to a joint one post marriage. In such situations, it would be prudent to analyse both the individual CIRs and take a consolidated action on what is needed to make their financial situation better. 
 
Maintaining a good credit score is easier said than done. A few simple steps can go a long way in keeping a check on your credit history. 
 
Always pay as agreed 
 
All repayments - and missed ones - are recorded on your CIR. Missed payments and high outstanding amounts negatively impact your credit history and credit score. Pay your EMIs and credit card dues on time and as agreed to the lender. 
 
Joint and guarantor credit a/cs 
 
Monitor your joint loans or loans where you are the guarantor regularly , since you are held equally liable for missed payments. Joint holder's negligence could affect your ability to access credit/loan when you need it. Also evaluate the possibility of moving an individual loan to a joint mode. In this way, both of them can avail additional tax benefits which in turn will result in family savings. Such opportunities also provide each partner to monitor the financial situation of the family and total outstanding. 
 
Credit/loan applications 
 
Inquiries made by lenders because of an application you made for credit or loan can affect your score. Too many inquiries might mean that you're taking on too much loan or that you're in some kind of financial trouble and are looking for credit to help you out. In most of the cases, it will be prudent to apply for the loan as joint holders rather than individual persons. 
 
How to improve your score? 
 
Recency of the occurrence of the default is considered by the lenders. As a result, though defaults may have some impact on your overall credit rating, it should not prevent you from availing of a new loan if your payment behavior subsequently has been regular across the loans and credit cards you hold. However, in case of couples, one of them having a better than expected score can compensate to having slightly poor score of the other. Such scores will be viewed complementary in case of joint liability when couples apply for a loan. 
 
The credit score is impacted by a combination of both negative and positive events. Many banks allow customers to rebuild their credit record with a secured credit product and the credit card with a deposit securing it is an example. This is definitely a good means of rebuilding a good track record. 

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy: Times of India

Tuesday, 25 February 2014

Cybercrime Victim Gets Back Partial Amount After Year-long Battle

A clearing agent, who lost Rs 20 lakh in a matter of half an hour to cyber crime, has got back only a part of the amount after fighting a year-long battle. However, the police are yet to make any headway in the case and find out the culprits.
 
The Ballard Pier Metropolitan court recently ordered release of Rs4.89 lakh to Rajesh Rele from one of the banks, where the stolen money had been transferred in smaller amounts via net-banking. Rele has been asked to furnish a personal bond, which means that he is under the obligation of returning the money if any claimant comes forward and is notified as the rightful owner.
 
Gamdevi resident Rele is a partner in M/s Eastern Clearing and Forwarding Agency. To make payment towards custom duties he had activated the phone banking option, allowed by his bank in Fort.
 
On May 16, 2013, Rele received a missed call on his mobile phone. When he returned the call, he found that an unknown person was on the other side. Few hours later, Rele's mobile phone services were suspended. Concerned, he contacted his mobile operator. He was surprised to learn that his service had been deactivated on 'his' request.
 
Rele informed his mobile operator that he had not placed any request to deactivate his service. It was then he was asked to check whether his bank account was secure. To Rele's dismay, a total of Rs 20 lakh had been usurped and the money had been transferred to different accounts in bank in Delhi and Kolkata through netbanking.
 
He rushed to his bank and directed the accounts to be freezed. A Delhi account where Rs 7 lakh was transferred was with the same bank as his. Thus the amount was claimed within few days. However, the remaining money had been moved to accounts in private banks and to accounts of individuals.
 
Advocate P Runwal, who appeared for Rele, told the court that his though his client went to the cybercrime police station at Bandra Kurla Complex, they refused to entertain his complaint. Rele then approached the MRA marg police station, which a registered an FIR after 12 days.
 
"Till now there has been no headway in the investigation and the only assistance received from the police is that they wrote letters to the bank to freeze the accounts," Runwal informed the court.
 
Rele then started writing to banks regarding recovery of his money. A private bank that had received Rs4.89 lakh in the account of one of its customers from Rele's account asked him to get a court notice before it could share the client's details. Notices were then sent to the person, asking him to appear before the court.
 
After a hearing over months the court finally accepted Runwal's arguments that even after serving notice to the person, in whose account Rs4.89 lakh had been deposited, there was no response and thus the money should be released.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: DNA

Monday, 24 February 2014

Thieves Steal Credit Card Data To E-shop

MUMBAI: The Cuffe Parade police on Sunday detained three suspects from Uttar Pradesh who had conspired and executed a credit card fraud in Mumbai. The accused targeted at least 60 customers of a bank in Navy Nagar and shopped online for goods worth over Rs 13 lakh, said police.
 
Krishna Prakash, additional commissioner of police, south region, said, "We had earlier arrested an accused, Krishna Pandey, who had come to take delivery of the orders placed on the Web. During his interrogation, we learned that the main accused, Sonu Yadav (21), was hiding in Gorakhpur, Uttar Pradesh. The gang targeted customers of Central Bank of India, Navy Nagar branch." 
 
The police are in the process of getting the suspects to Mumbai. "A bank official lodged the police complaint after they received several complaints of money being deducted from the accounts of some customers," said a police source. 
 
"They would order TV sets, fridges, high-end mobile phones, IPads and other costly electronics items online. Their intention was to purchase online and sell these goods immediately. It's still not clear how they got the credit cards' 16-digit numbers and passwords," said an officer. Those detained in Gorakhpur include Yadav, his accomplice Harish Pandey and two others. 
 
A computer and hard disc have also been seized. Police said that the accused managed to obtain the 16-digit credit card numbers and hacked into the bank's system to get the password. 
 
Twenty-six-year-old Pandey, the arrested accused, is a class XII dropout. He told the police that he was jobless and came in touch with Yadav, who was also from his hometown. Pandey reportedly asked Yadav for a job to earn livelihood. Yadav asked him to collect products for customers of online shopping. Pandey was promised a commission. He was arrested when he went to take delivery of a TV set. 
 
While a waiting police team caught Pandey, Yadav managed to flee from the spot in Thane last week. The accused have been booked for cheating (Section 420 of IPC) and hacking (Section 66 of IT act). Yadav is said to be a diploma holder in computer studies. The gang first committed the fraud in October and continued till January this year. "We have managed to spot several transactions wherein the accused had placed orders. We have recovered some products and are hoping for more," said the police. 
 
O P Shrivastav, the bank's assistant general manager asked this correspondent to talk to his deputy Ayyubi, general manager (credit cards). Ayyubi could not be contacted. 

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy: Times of India

Check Your Credit Score Before Applying For That Loan

Earlier, lenders had to rely on their own internal assessment of a customer before sanctioning loans or even credit cards. However, gradually the situation has changed with the availability of individual credit information through CIBIL (Credit Information Bureau India Ltd), which has enabled lenders to determine creditworthiness by dipping into this database to assess the applicant.
 
So the question of whether you will be sanctioned that home loan and at what interest rate would be determined by your credit score. That’s why, it is important that you monitor your credit scores and purchase your credit report from CIBIL.
 
Elsewhere in the world if you have been rejected a loan on account of a low credit score then you have the option of approaching select lenders who specialise in lending to borrowers who have recently come out of a bad credit situation. But in India, this is not widely prevalent though there are a crop of banks that do provide loans for such individuals at very high interest rates and a lenient credit profile appraisal.
 
So it becomes all the more critical for you to monitor your score to ensure that your loan does not get rejected on the grounds of a poor credit score. Otherwise, you will struggle to obtain a loan when you badly need one and might end up signing for an exorbitantly expensive loan, which might be difficult to repay!
 
Credit Score: The basics
 
What does a credit score look like, and what counts as a good score?
A credit score is generally a three digit number within the range of 300 and 900. Higher the number, better is the score. This score will reflect information from several lenders and across various loans.
 
What information does a credit report contain?
 
The report contains basic information about the consumer (name, date of birth, passport number etc.), location, details of loan accounts (auto loans, home loans, personal loans and credit card), overdue accounts, highest amount of credit sanctioned in case of credit card, number of times credit report requested by the creditor along with enquiry purpose.
 
What should I do if the score is incorrect?
 
Sandeep applied for a home loan from ABC bank. The bank rejected his loan application on the grounds that his credit report mentioned that he has a long overdue outstanding amount on a credit card.
 
This took Sandeep by surprise and the issue was amicably settled with the bank, after which he stopped using the credit card. He got the bank to acknowledge the fact that he had cleared his outstandings and he subsequently informed CIBIL, presenting the acknowledgement from the bank as proof for his claim. CIBIL then verified and incorporated the updated, correct info in his credit report and he was granted a loan.
So we see from this example that errors are bound to happen due to incorrect reporting by lenders or due to human errors.
 
If you find an error, you would need to report it to CIBIL with valid proof and if you are not satisfied with the action you can lodge a complaint with the Banking Ombudsman's grievance cell, who will take up the issue and evaluate it from a neutral stand.
 
How often does my credit score get updated?
 
Updating the credit report will be an ongoing process — lenders send updated data regarding an account to the agencies. It depends on how may credit accounts the individual has and if there is a change in the credit data. The moment there is a change in the credit data, it will reflect in the credit score.
 
What makes this system fool proof for lenders?
 
Rajat has taken a home loan from ABC bank and has been paying his EMIs in a timely manner.
 
Simultaneously, he has taken an auto loan from XYZ bank and has defaulted on the last few payments.
 
Rajat now applies for a personal loan from ABC bank assuming that since he has paid his home loan EMIs with the bank in a timely manner, he will be granted a personal loan without any trouble. However, what he was not aware is that ABC bank obtains a credit score from CIBIL where he shows up as a defaulter with another bank.
 
This could either result in a rejection of his personal loan request or the bank might charge him a high rate of interest. The emergence of CIBIL as a repository of information on individual lenders makes it impossible to hide anything from your creditor.
 
Is there any benefit of a good score to me as a consumer?
 
The most significant advantage of a good credit score is that you can use it to negotiate with the bank for a more favourable interest rate, citing your impeccable repayment track record.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy: Financial Express

Friday, 21 February 2014

Online Frauds Duped Lucknow Folk Of Rs 1.40 Cr In 2013

LUCKNOW: Residents of the city were duped of close to Rs 1.40 crore last year. The weapons used to rob them were not firearms, daggers, knives, or harmful sprays etc-just glib talk and cunning tactics of some tech-savvy youths did them in.
 
Armed with technology, gangs exploiting the field of online banking duped about 500 persons in Lucknow last year. The annual figure available with cyber cell at Hazratganj (Rs 1.40 crore) might be just the tip of the iceberg compared to the actual money Lucknowites may have lost. "Many of the persons duped do not come forward to report bank frauds if the amount seems trivial to them," shares DySP Dinesh Yadav, nodal officer of the cell.
 
On Tuesday, three complainants walked into the cell within less than two hours to report bank frauds. A PAC head constable was one such who got a call from a 'bank executive' on Tuesday morning. In his early 50s, the policeman was not savvy with the new style of fraud and bit the bait when the caller lured him into sharing personal details.
 
"The caller told him the bank was sending new ATM cards to old customers that will have account holder's photograph on the card. He had the card number beforehand and asked the policeman for the ATM PIN. The elderly person realised too late his mistake after Rs 10,000 had been withdrawn from his account," elaborated cyber cell inspector SC Malviya.
 
The gangs seemed to have turned extremely aggressive in past four months and compared to last year there was a surge of more than 40%. The cell received 470 complainants pertaining to bank fraud in 2013 while in January it got about 70 complaints of online frauds. Two gangs working in the field were busted in past three months but recovering swindled amount is a difficult task.
 
Miscreants call from various parts of the country and cheated funds are transferred into accounts in different states. The cell have identified hundreds of bank accounts that have got ill-gotten amount to the tune of Rs 80 lakh last year but is unable to do much as the offences have been taking place beyond their jurisdiction.
 
On receiving a complaint the bank is asked to provide the IP address of the computer or device used to carry out transaction. The internet provider is then asked to provide details of the customer holding the connection and local police is alerted. Most of the times forged IDs are provided to get connection and probes hit dead end there. "Prevention is the best cure in such cases," sums up Yadav. On an average, complainants lost about Rs 8,000 to Rs 25,000 and in rare cases amounts over Rs 1 lakh were swindled.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS Identity Shield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy : Times of India

Thursday, 20 February 2014

Phishing Attacks Rise Six-fold: Symantec

What could set the alarm bells ringing for the Indian banking system is the revelation that there has been a six-fold rise in phishing attacks on the country's lenders during the last four months alone.
 
Phishing is a form of internet fraud that aims to steal valuable information such as credit card details, social security numbers, user IDs and passwords for financial gains.
 
The fraud is executed through spoof emails and fake websites that prompt users to disclose their personal details.
 
The 24X7 Security Response Lab of Pune-based internet security firm Symantec found that in October last year, there were 20 unique attacks on Indian banks while the figure has grown to 120 attacks as of January, 2008.
 
"The attacks are now becoming more localised, subtle and target-specific... The increase in the number of attacks reflects that they are getting successful," said Prabhat Kumar, director, Security Response, Symantec.
 
From fame, the phishers are now turning towards making a fortune, he added.
 
The Symantec lab monitors the complete threat spectrum and malware activity all across the world. It provides support in 14 languages against phishers who are extensively using sophisticated methods to install spyware, Trojans, worms and viruses.
 
But, it is not actually a security breach for the bank.
 
"The banks have put in the best possible security but it is the unsuspecting user on whose back the phishers enter the system," Singh said.
 
The latest Internet Security Threat Report by Symantec had ranked Mumbai as the most notorious in India in terms of phishing sites with 38 per cent, followed by New Delhi with 29 per cent.
 
Even Tier-II cities like Bhopal, Surat, Pune and Noida too had reports about phishing site activity.
 
"Surprisingly, a large number of home PC users do not even have a basic security feature," Singh said.
 
The report highlighted that the malicious code in India included 57 per cent worms and 21 per cent virus attacks but even complex threads like Trojan made for about 20 per cent of the attacks.
 
Recently, leading private sector lender HDFC Bank had filed a police complaint against a "money mule" scammer. The accused had used a bank customer as a mule to transfer money, acquired through phishing attacks, to different accounts.
 
Even the Reserve Bank of India (RBI) had advised the public not to succumb to the temptation of fictitious offers of large funds through e-mails from unknown entities.
 
"Members of public should also not make any remittance towards participation in such schemes/offers from unknown entities," it had said in a recent notification.
 
The RBI has issued the warning to caution individuals who initially receive tempting offers of large funds on various pretexts from unknown overseas entities through e-mails and letters and are later requested to remit a small amount as commission for transfer of the money.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.


CS Identity Shield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy : Business Standard

Tuesday, 18 February 2014

Improved Technology Increases Vulnerability To Cyber Crime, Cops

Technology has made life easier for all, but this has also increased vulnerability to cyber crime. For instance, with smartphones and easy accessibility of the internet on it, Thane cyber crime cell has seen an increase in cyber crimes.
 
Cyber crime includes crime done through mobile phones, social networking sites, credit and debit card transaction.
 
On the condition of anonymity, an officer from cyber cell said, "Though the internet was introduced to minimise time, today many people are misusing it. With young children getting access to smartphones easily, they start surfing various sites and in turn indulge in unlawful activities."
 
"Parents should not give mobile phones to kids unless there is some emergency," he adds.
 
Specifying the types of crime committed through the internet, he says, "Facebook and bank fraud casea are on the rise. People make fake profile and then lure someone for cash and for other purposes. Crimes through WhatsApp and other software are, however, very less."
 
He added, "There was a juvenile boy who used to call on unknown number and when we identified him he accepted watching porn clips on his father's cell phone. As his father was not tech savvy, he was not aware of what his son was up to. The matter came to light when one day this boy called a random girl and asked her for sexual favours. The girl approached the police and got the boy arrested. He was later sent to remand home."
 
Deputy commissioner of police (cyber cell) Sudhakar Pathares said, "The cases have increased in the last three years. By the time we come up with an efficient way of detecting the culprits, they come up with the new a tactic. We are trying to curb such activities, but technology is growing at a faster rate and it is not easy to control them."
 
He added, "We have tracked so many cases and are trying to minimise cyber crimes, but with changing technology and new software it's a challenge. For instance, on WhatsApp allows you to seen when the person was last seen. This helps us detect some cases."

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Read More : DNA

Monday, 17 February 2014

Credit Scoring: A Tool To Aid Bank Lending

It Is important for banks to look beyond their existing customer base and reach out to the vast number of micro and small enterprises (MSEs) which are deprived of bank credit. Alongside extending the reach of their banking services, there would be a need to improve and customise the products offered, fine tune the pricing aspects, and enhance the quality and efficiency of services. For this, banks need to have a proper business plan and delivery model that would harness the benefits of technology. The costs of banking transactions need to be dramatically reduced just as in so many other fields such as telecom, after the advent of technology.
 
Alternate appraisal techniques
 
We need to appreciate that the credit process in case of micro and small entrepreneurs cannot be identical to that of large corporations, where the borrower is able to provide detailed information about business plans and the firm’s financial statements and the lender carefully reviews the data using analytics that are time-consuming and expensive.
 
In view of the relatively small size of the loan, banks do not find it worthwhile to conduct an elaborate appraisal of SME credit proposals both in terms of value and profit. Therefore, in order that the banks can quickly conduct the appraisal of SME loan proposals without expending too much resources, it would be imperative to ensure the efficiency of the appraisal process.
 
Financial institutions in the developed countries use different lending techniques to provide funding to small firms. The banks, in these countries, use a version of a computerised loan-evaluation system, referred to as credit scoring, to assess would-be borrowers. The credit scoring approach, using computer technology and mass production methods, was originally designed to handle consumer loans, but are now being used effectively for lending to small businesses by predicting their potential loan delinquency. Credit scoring offers a modern alternative for the traditional method of evaluating loans for small businesses.
 
To expedite the credit flow to the MSEs, RBI, as a proactive measure, issued guidelines in May 2009, advising banks to start using scoring models for making lending decisions in case of all advances up to
R2 crore. However, despite, our instructions having been issued nearly five years back, we find that the use of credit scoring model in the real sense has not really taken off in India. Our assessment is that perhaps the lack of conceptual clarity on the subject could be one reason for the banks’ reluctance in using the credit scoring model. In fact, very often credit scoring is misunderstood or confused with credit rating.
 
What is credit scoring?
 
Credit scoring is a statistical technique that combines several financial characteristics to form a single score for assessing a borrower’s credit worthiness. The score does not predict a company’s ability to pay, but rather its willingness to pay in a timely fashion. The probabilities of delinquency, as estimated by the model, are based on the analysis of previous applicants with similar characteristics. Credit scorecards are “tools used to predict the behaviour of new applicants based on the performance of previous applicants” (US Comptroller of the Currency, 1998). Scorecards can also be used to predict the performance of existing accounts, based on the past experience of accounts with similar characteristics.
 
Credit scoring is a model applied by banks in their assessment and approval or decline of the loan requests by SMEs. As there is a strong link between the payment behaviour of the business owner and that of the business, SME credit scores usually include financial characteristics from both the business and the business owner. Credit scoring is based upon information like how the repayment of the previous loans has gone, what is the current income level of the enterprise, what are the outstanding debts, if any?
 
It focuses on the credit history of the enterprise. As part of the process, the lenders see whether the enterprise/business owner has the reliability and honesty to repay the loan. It also examines how the enterprise has used credit before, its record for repayment of bills, including utility bills, how long the enterprise has been in existence, assets possessed by the enterprise and sustainability and viability of the activities that the unit is engaged in. Credit scoring model draws inputs from historical information on the performance of loans with similar characteristics.
 
Credit scores have been widely used for many years in consumer credit markets e.g., mortgages, credit cards, and auto loans. In the mid-1990s, Fair Isaac and Company introduced one of the first credit scoring models developed exclusively for SMEs, the Small Business Scoring Service (SBSS). Since then, many SME banks in the US, as well as in Canada, the U.K., and Japan, have implemented some type of credit scoring for SME borrowers.
 
Different from credit rating
 
Credit scoring and credit rating are two entirely distinct concepts and to be employed in distinctly different scenarios. Credit scoring is a statistical technique that combines several predetermined characteristics to form a single score to assess a borrower’s credit worthiness. Any two identical applications will always receive the same score. Credit rating, on the other hand, is based more on the experience and judgment of the credit officer and uses financial indicators as the key. The objective of scoring is to replicate the manual analysis and approval of loans at a lower cost, with greater speed, while the use of credit rating is reliant on the manual analysis by credit officers to supplement the rating provided by the tool.
 
To put it simply, credit scoring uses a retail lending approach to credit screening/decision making and is recommended for smaller ticket-size loans, where adequate reliable financial data about the borrower is not available. Credit rating is a more appropriate tool for larger, mid-segment or corporate loans, which have relevant financial data/business plans that provide the basis for further credit analysis and information.
 
Benefits of credit scoring
 
When used appropriately, credit scoring can benefit multiple stakeholders, including lenders, borrowers, and the overall economy. For the lender, scoring leads to process automation, which facilitates process improvements, leading to many byproducts such as improved management information, control and consistency. It also increases the profitability of SME lending by reducing the time and cost required to approve loans and increasing revenues by expanding lending opportunities.
 
A study in the US estimated that the cost of evaluating micro loan applications in the US using credit scoring was reduced to around $100 compared to a range of $500-$1,800 prior to the introduction of credit scoring. The time saving involved meant that banks could focus more time on marginal applications, existing loans that are showing signs of distress and processing more loan applications.
The Bank of England has also acknowledged that there is some evidence of banks being more willing to lend on an unsecured basis when using credit scoring, which potentially improves the access to bank finance for very small and start-up SMEs.
 
For the borrower, the benefits from credit scoring include increased access to credit and, in some cases, lower borrowing costs. In its study of SME credit scoring’s impact on access to credit, the Federal Reserve Bank (FRB) of Atlanta found that, in general, the use of credit scoring increased the amount of credit banks extended to the SMEs. It found that banks using scoring were more likely to lend in low-income areas.
 
Given the extent of exclusion in the SME sector and the criticality of the sector for the economy, banks urgently need to step up lending to the sector. For evaluating loan proposals and for facilitating SME financing, banks would need to employ low-cost and quick decision-making alternatives. The use of credit scoring models can go a long way in facilitating lending decisions by reducing costs and increasing service levels.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy : Financial Express

Internet Leading To Increase In Cyber Crime: Parliament Study

New Delhi: The hacking and defacing of websites in India has “highly perturbed” a Parliamentary Committee which examined the issue of cyber crimes and cyber security and found that 3,911 India’s websites were defaced or hacked upto June 2013 and majority of these which was around 2667 out of 3911 attacks were the ‘.in’ domain whose servers were in India.
 
In its 52nd Report, the Standing Committee on Information Technology tabled in Parliament on Wednesday found that while the usage of internet has facilitated transparency and greater accountability, it has at the same time led to increasing forms of cyber crime and cyber threat each day with newer challenges for data protection and security.
 
This assumes significance since the internet user base has increased to 100 million and total broadband subscriber base has increased to 12.69 million. The target for broadband connections in the current year is 22 million.
 
Today the country has 134 major ISPs, 10 million registered domain names of one million are  ‘.in’  domains and over 260 data centers all over the country.
 
In its 83-page report, the Committee chaired by Rao Inderjit Singh expressed concern over the consistent increase in cyber crime cases in the country during the last five years.
 
It said according to the record of  cyber-crime data maintained by the National Crime Records Bureau (NCRB), a total of 420, 966, 1791 and 2876 Cyber Crime cases were registered under the Information Technology Act during the years 2009, 2010, 2011 and 2012 respectively.
 
The report said that a total of 276, 356, 422 and 601 cases were registered under Cyber Crime related sections of Indian Penal Code (IPC)  during  2009, 2010, 2011 and 2012. respectively.
 
The Committee found it disquieting that the quantum of financial loss and privacy related cases in the country due to cyber attack and fraud in the last few years have increased.
 
The Report said that according to the Reserve Bank of India in the last five years though the number of fraud cases reported by Banks on account of ATM Debit Cards/Credit Cards and Internet have decreased from 15018 in 2010 to 8322 in 2012, yet the amount involved had increased from Rs 40.48 crore to /Rs 52.67 crore in 2012.
 
However, the Committee was of the view that the reported number of cases involving financial fraud due to cyber related cases is just the tip of the iceberg as a number of cases go unnoticed and unreported.
 
The Committee expressed unhappiness over the involvement of too many agencies maintaining separate data on cyber crime cases and felt that there should be one single, centralized cell or agency to deal with all cases of cyber crime or threat in the country.
 
Having one agency to look after cyber crimes and cyber threats, the Committee said would not only help the Department in knowing the pattern of the crime but also prevent recurrence of same kind of crimes with newer strategies.
 
It felt that the Department of Electronics and Information Technology (DIETY) should work in this direction and apprise the Committee of the action taken in this regard.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

CS IdentityShield helps you to Monitor, Protect and Recover your Identity from multiple risks.

Courtesy : Greaterkashmir.com

Thursday, 13 February 2014

Telcos Use Credit Score To Check Risk Appetite

Your credit score and credit information are your reputational collateral which reflects your credit behaviour and provides an indication of your debt management capacity. Postpaid telephone connection is an alternative form of credit. Which means, through a postpaid connection, the telecom service provider gives us an advance credit facility and trusts us to make the bill payment of our usage, by the due date.
 
In some countries, telecom service providers are using credit scores and credit information for making instant decisions on postpaid telephone service applications to grant on spot telephone connections to consumers. When you apply for a postpaid telephone facility, the service provider will pull your credit score and credit history which gives the information provided by you in the application. Your score will enable the service provider to assess your financial standing and project your likelihood of paying the postpaid telephone bills regularly. Once the telecom service provider runs know your customer (KYC) check on your documents and is satisfied on your payment capacity, they will be able to grant you the postpaid telephone service instantly.
 
Credit score is also being used by telephone service companies to evaluate the “risk appetite” of the consumer and assign “credit limit” as per the credit behaviour of the consumer. Value added services may also be offered to consumers based on their credit score.
 
In developed economies, an individual’s credit information report and credit score are very critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom service providers check an applicant’s credit history before providing a postpaid phone connection. In the future, a person’s credit information report and credit score will be imperative for a lot many things in addition to availing institutionalised credit facilities.
 
Therefore, it is important to maintain financial discipline and prudently manage all your financial obligations in order to build and maintain this vital reputational collateral that will become critical for a lot of transactions in the future. Review your credit history and credit score frequently to start developing this reputation collateral.

Credit Sudhaar is India's first Credit Health management & improvement company whose goal is to help clients to Restore, Enhance and Protect their Credit and make them credit healthy.

Courtesy : DNA