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Thursday 16th of September 2010

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September 8, 2010

Fraudulent loan applications up 33%

by Gill Montia

Story link: Fraudulent loan applications up 33%

Experian has reported that in the first half of this year, 19 in every 10,000 loan applications received by UK financial institutions were identified as fraudulent, the figure showing a 33% increase on the second half of 2009.

Notably, first-party fraud, which involves individuals attempting to hide adverse credit histories or misrepresenting their employment status, has now overtaken third-party identity fraud.

Automotive fraud increased by 35%, with 34 in every 10,000 applications for automotive finance detected as being fraudulent during the six months to the end of June.

Mortgage fraud also increased, despite dipping slightly in the second half of last year.

The figure now stands at 35 in every 10,000 applications received identified as fraudulent, with the majority of cases involving applicants misrepresenting their situations.

Attempted current account fraud has shot up from 17 per 10,000 to 27 per 10,000 in past 12 months, with identity theft now accounting for around one-in-three attempts to open fraudulent current accounts.

Turning to credit cards, following a boom in the first three months of the year, the number of fraudulent applications dropped to 18 in every 10,000 applications during the second quarter of 2010.

Finally, the insurance fraud rate fell during the first half, having hit an all-time high of 16 fraudulent applications per 10,000, in the final three months of 2009.

The figure has since halved and now stands at eight applications in every 10,000.

 

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