LAKE BLUFF, Ill., Nov. 4 /PRNewswire/ -- Moebs Services today announced the debut of "Debit Scoring(SM)" the company's newly patented financial modeling service that represents a breakthrough in financial history reporting and analysis.
"Organizations lose untold millions each year by making poor decisions based on inaccurate estimates of risk," said economist and banking expert Mike Moebs, Chairman of Moebs Services. "Existing reporting systems have lacked a truly unbiased, purely 'blind' analysis of the financial risk associated with a customer, potential employee, etc. The market is hungry for something that can reduce risk to companies while also providing helpful information to consumers about their own financial history. Now we've patented the formula and are working to make it widely available," he added.
Debit Scoring(SM) offers a superior, non-discriminatory alternative to traditional 'credit scoring,' especially for the dozens of situations that call for assessments of financial responsibility history beyond credit, such as when consumers apply for a new job, insurance policies, deposit services, a rental apartment, or to buy or sell securities. According to Mike Moebs, basic credit reports are fine, but limited. While they can paint a general picture of credit worthiness, they offer little behavioral insight into a consumer outside the credit arena.
For example, landlords routinely complete financial background checks on applicants, but they must then decide whether the credit score is enough for disqualification. This subjective process may in turn expose them to costly discrimination complaints and even lawsuits from consumers they reject. The Moebs Debit Scoring(SM) model uses a purely empirical approach to provide a more accurate financial fingerprint of the individual, and it requires no further interpretation.
As the Fair Credit Reporting Act and the Patriot Act catapult financial privacy into the public spotlight, financial institutions are acutely aware of the need for improved 'automatic decision,' or scoring models. According to Moebs, the most common need for Debit Scoring(SM) appears to be for banks and credit unions involved with overdrafts.
"Overdraft services are currently hot with financial institutions suffering the loss of fee revenue with the reduction of interchange fees on debit cards and other economic factors hurting bank and credit union profits," says Moebs. However, the overdraft wave has raised the ire of consumer groups who view these services -- especially when linked to "free checking," low check limits, direct deposit and high overdraft fees -- as equivalent to payday loans. "Debit Scoring provides a non-discriminatory methodology that helps institutions to identify consumers that want to utilize various for-fee services, which in turn contributes to increased fee income and profits for financial institutions."
This Debit Scoring(SM) process is the first and only one in the industry that uses a patented formula. By uniquely integrating consumer reports with FICO scores, customer/member data, fraud data and other "econographic" (economic demographic) information, it gives organizations a truer behavioral and financial fingerprint of individuals seeking its services.
"By weighing all the indicators of responsible financial behavior, Moebs Debit Scoring(SM) can help organizations make smarter financial service decisions that can significantly contribute to increasing consumer satisfaction and revenues for financial instit
