What is a straight roller?
A gambler is an industry term for a credit card or loan account that goes directly into default without the borrower making any effort to make payments as the account moves from the current 30s, 60s, and 90s. days behind, to the losers. .
- Simple accounts are delinquent loan or credit card accounts that go directly into default without the borrower making any effort to make payments.
- Financial institutions generally classify simple accounts as canceled.
- These accounts can also indicate credit card fraud, such as illegal fraud.
- However, direct accounts cannot be used in predictive models to assess default risk.
Understanding the straight roller
Simple accounts get their name because they exceed the standard delinquency dates of 30, 60, and 90 days without stopping. This move distinguishes them from other distressed loan accounts in which borrowers make enough payments to get in and out of maturity.
The path taken by a roller marks the fastest route an account can take from current to default, presenting difficulties for lenders who use predictive models to estimate the potential for distressed debt. When lenders find borrowers struggling to make repayments on time, they can adjust their risk assessment accordingly. Lenders have a much harder time predicting future patterns of default among borrowers with clean credit histories.
Financial institutions maintain policies on how long an account must be in arrears before it is considered bad debt and issuing a write-off. For example, Experian generally converts single roll accounts to cancellations after a 180-day delinquency.
At that point, finance companies can either write off the debt or sell it to a third-party collection agency. In either case, the borrower still legally owes the debt, which means that the lender or the collection agency has the legal means at their disposal to continue trying to collect after the account is canceled.
Blowout fraud and never pay
Depending on the disposition of an account prior to default, lenders may classify the behavior of a checking account as one of two types of fraud. Never pay fraud occurs when a borrower opens a credit card or loan account and never bothers to make a payment. Credit cards that build excellent credit before going straight into default can pose a more difficult target for lenders. Lenders call this pattern a fraud.
Bank accounts establish normal borrowing and repayment patterns before making a major transaction. Private fraud perpetrators can also open multiple accounts with different lenders over a period of time before maximizing them and refusing to make more payments.
Because simple accounts become dangerous so quickly, lenders use a variety of tools to rate borrowers and monitor account usage patterns in an attempt to quickly identify potential problems and limit losses to the extent the possible.
For example, unusually large transactions that seem to occur outside of the normal patterns of a credit card user often trigger fraud protection responses. While the suspension of a card by these patterns can help reduce transactions made with a stolen card, such movements could also limit the harm of a cardholder who commits fraud.