Nine in 10 mortgage fraud cases involve individuals painting a knowingly false
picture of their personal circumstances on an application, Experian says.
Photograph: Whisson/Jordan/Corbis
The level of fraud on mortgages and insurance policies has more than doubled since the start of the credit crunch, and the ongoing squeeze on household finances is likely to lead to more cases, a credit reference agency has claimed.
Figures from Experian show that although the total rate of fraud on financial products has fallen since 2007, in certain areas there have been big increases in the number of false applications.
Its data shows that the rate of mortgage fraud increased to 38 cases in every 10,000 applications in 2012, up from 35 the previous year, and more than double the 18 cases per 10,000 recorded in 2007.
Nine in 10 cases involved individuals painting a knowingly false picture of
their personal circumstances on an application, with the most common action
being an attempt to hide a poor credit history. False statements about the
applicant's employment status or financial circumstances also featured.
Experian said mortgage fraud cases were highest among the social group made up of middle-aged, middle-class, and skilled working-class individuals.
Over the same period the number of fraud cases involving insurance policies also increased more than two-fold, from 5.44 in every 10,000 cases in 2007 to 12 in every 10,000 in 2012. In this sector, 86% of frauds involved the person applying for the policy or making a claim.
Across the board, Experian said the group responsible for the most fraudulent applications for financial products in 2012 was a group it classifies as "Terraced melting pot". This group, which represents people in routine urban occupations, was responsible for 21% of first-party fraud cases over the year.
The "Liberal opinion" group, which consists of young professionals and well-educated people, came next accounting for 14% of first-party cases. In total, about 70% of financial services application fraud was down to first parties misrepresenting their circumstances.
Experian said it expected fraudulent applications to continue to rise throughout 2013, driven by the ongoing squeeze on household incomes and benefits, and stricter credit and lending criteria.
"As a result of poor or patchy credit, more and more 'non-professional' fraudsters are clearly attempting to ease their position, misrepresent applications or make exaggerated claims over their income and personal finances," said Nick Mothershaw, UK director of identity and fraud at Experian.
"Mortgages, current accounts, insurance and cards will continue to come under pressure from fraudsters keen to get their hands on cash facilities."
The level of fraud on mortgages and insurance policies has more than doubled since the start of the credit crunch, and the ongoing squeeze on household finances is likely to lead to more cases, a credit reference agency has claimed.
Figures from Experian show that although the total rate of fraud on financial products has fallen since 2007, in certain areas there have been big increases in the number of false applications.
Its data shows that the rate of mortgage fraud increased to 38 cases in every 10,000 applications in 2012, up from 35 the previous year, and more than double the 18 cases per 10,000 recorded in 2007.
Experian said mortgage fraud cases were highest among the social group made up of middle-aged, middle-class, and skilled working-class individuals.
Over the same period the number of fraud cases involving insurance policies also increased more than two-fold, from 5.44 in every 10,000 cases in 2007 to 12 in every 10,000 in 2012. In this sector, 86% of frauds involved the person applying for the policy or making a claim.
Across the board, Experian said the group responsible for the most fraudulent applications for financial products in 2012 was a group it classifies as "Terraced melting pot". This group, which represents people in routine urban occupations, was responsible for 21% of first-party fraud cases over the year.
The "Liberal opinion" group, which consists of young professionals and well-educated people, came next accounting for 14% of first-party cases. In total, about 70% of financial services application fraud was down to first parties misrepresenting their circumstances.
Experian said it expected fraudulent applications to continue to rise throughout 2013, driven by the ongoing squeeze on household incomes and benefits, and stricter credit and lending criteria.
"As a result of poor or patchy credit, more and more 'non-professional' fraudsters are clearly attempting to ease their position, misrepresent applications or make exaggerated claims over their income and personal finances," said Nick Mothershaw, UK director of identity and fraud at Experian.
"Mortgages, current accounts, insurance and cards will continue to come under pressure from fraudsters keen to get their hands on cash facilities."
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