A Veda Advantage study into credit risk found that people who use multiple identities to obtain credit are 13.7 times more likely to default on personal loans than the general population.

Veda Advantage’s study of more than 75,000 people has revealed that those with three or more identities are associated with much higher credit risk. People with multiple identities defaulted 11.4 times more often on phone bills, were 3.2 times more likely to become bankrupt, and recorded 4.2 times more writs and judgements than people in the general population.

Veda Advantage’s sophisticated matching algorithms are designed to detect people who change their personal details either by accident or for fraudulent purposes. The system is set to distinguish between those who change their names intentionally, for example as a result of marriage, and those who do so to commit fraud. The risk of fraudulent activity does not extend to those who change or hyphenate their surnames as a result of marriage.

Veda Advantage cross references all identities into a single customer view, to make it easy for credit institutions to keep track of their customers.

“Every time an individual makes an application for credit, whether it’s to start or change a phone plan, or apply for a credit card, their ‘identity’ details are updated on their credit file,” says Erica Hughes, general manager of information, services and solutions.

“Some people are under the false impression that if they simply change the identity details on their account, all their defaults or other elements of their credit history will be lost. However, this study exemplifies the fact that people who change their details for fraudulent reasons are actually associated with higher credit risk. We have invested in hiring the smartest people, and have utilised the most advanced technology, to ensure people who assume multiple identities for fraudulent purposes are detected, and denied credit,” she says.

“However, because Veda Advantage’s sophisticated matching is so advanced, it is able to clearly distinguish between people who change their details to abuse the system, and those who do so accidentally or legitimately. For example, if a woman decides to change her surname when she gets married, her new ‘identity’ details are cross-referenced to her original account, and she is not associated as a higher credit risk. Similarly those who change minor details by accident, depending on the seriousness of the loan they are applying for – from ‘Matt’ on a phone account, but ‘Matthew’ on their home loan, are also not penalised and are not necessarily a higher risk,” she explains.