What you need to know about blacklists

A blacklist is an organized list that records the details of individuals who have engaged in misconduct. And there are so many blacklists all over the world (may or may not include Raymond Reddington’s blacklist).

However, the most popular is the United States of America (USA) No Fly List, a database (also known as the terrorist watchlist) maintained by the FBI’s Terrorist Screening Center. It contains the identity information of known or suspected terrorists or fraudulent individuals. 

In Nigeria and across Africa, we have both public and private blacklists. For instance, the Nigeria Interbank Settlement System (NIBSS) maintains a blacklist of Bank Verification Number (BVN) holders, commonly referred to as a watchlist, which includes individuals known to have been involved in financial fraud.

In essence, blacklists are places you want to avoid if you’re playing by the rules, but at the same time, they are necessary, and you need them to exist because they protect people.

Today, the internet has blacklists specifically for spam, such as Spamhaus, one of the largest in the world. These blacklists protect individuals by preventing their email inboxes from being flooded with thousands of spam emails. Without them, managing your inbox would be nearly impossible. Over 300 billion worth of emails are sent daily, and half of them are spam emails, i.e. a whopping 150 billion emails, imagine not being able to protect yourself against those.

Credit bureau vs Blacklist

A credit bureau is a CBN-licensed service, also known as a credit reporting agency. This organization collects and maintains individual credit information by running complex algorithms to determine their creditworthiness. 

On the other hand, a blacklist is a list of individuals or entities that are deemed to be high-risk or undesirable for credit or financial transactions. Unlike credit bureaus, blacklists are not comprehensive databases of financial behaviour.

Key functions of credit bureaus include:

• Credit reporting: Compiling credit histories and generating credit reports.
• Credit scoring: Calculating credit scores based on an individual’s credit history.
• Data management: Continuously updating credit information as it is received from creditors.

While key characteristics of blacklists include:

• Selective listing: Typically only includes individuals or entities with negative marks, such as defaults or fraudulent activities.
• Restricted access: Blacklists are often used internally by companies and unavailable to the public.
• Specific purpose: To prevent high-risk individuals from accessing credit or financial services.

Largest private blacklist in the credit ecosystem: A lender’s dream

At Lendsqr, we operate one of the largest blacklists in the financial services space in Nigeria. Our data comprises internal data and a community approach, where over 3500 lenders who use our technology freely provide data of individuals who have been identified as chronic debtors or are part of a fraudulent scheme.

So, today in Lendsqr, if a borrower uses a stolen identity to borrow from any of our lenders or uses a lender’s platform to launder stolen money or uses a stolen debit card during a loan transaction, best believe they’ve earned their permanent spot on our blacklist which alerts over 5000 lenders both internal and external. And they’ll most likely never be able to get a loan from any legitimate lender again.

Does this blacklist have a name? Of course, it does. We call her KARMA. Karma comes as a free decisioning package for lenders integrated with the Lendsqr loan management software. Nevertheless, everyone gets a chance to tap into this blacklist because Karma also exists as an API service and can be made available to interested parties on request. Learn more about Lendsqr APIs.

When you integrate with Karma, you gain access to data about individuals who have defaulted on their loan repayments or been involved in fraudulent activities. It’s up to you to determine whether these incidents happened too long ago to be relevant to your loan approval.

Karma’s calling: Lendsqr’s blacklist is saving lenders billions

We’ve done the math, and we’re thrilled to announce that Lendsqr’s blacklist, Karma, has cumulatively saved and still saving lenders billions. It’s an achievement we’re incredibly proud of.

If you ever need access to the Lendsqr blacklist, we’ve made it very affordable. Our priority is expanding community protection within the credit ecosystem, not profiting from it.

Sign up for Adjutor to get readily available access to all our API services, including Karma.