Why lenders can’t afford to delay verification upgrades in 2025

As whispers of a 2025 recession grow louder—spurred by macroeconomic tensions, rising import tariffs, and persistent inflation—lenders face the question: What happens to loan fraud and delinquency risks if the economy turns?

Argyle’s The State of Income and Employment Verifications 2025 report highlights already concerning trends in fraud and delinquency rates across lending categories. And if historical precedent offers any indication, a recession would only exaggerate these trends. But there are steps lenders can take to mitigate risks even as factors affecting the economic outlook remain beyond their control.

This post examines how macroeconomic pressures amplify fraud and delinquency and why implementing direct-source verification processes early in the application funnel becomes even more critical during economic downturns.

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