Increased Fraud Warning For Loan Companies
Loan providers and insurance companies have been advised to be on the look out for increased levels of fraudulent loan applications and insurance claims, as the latest insight report from the credit agency Experian has predicted a significant increase in fraud cases over the course of the coming year.
According to the figures from Experian, the number of fraudulent loan applications for home owner loans and mortgages has remained fairly steady since 2008, with somewhere in the region of 20 cases of fraud in every 10,000 loan applications, but they expect this to rise throughout the course of 2010.
A fraudulent loan application can in many cases be as simple as a person over stating their income, or not disclosing the details of any existing loans or other debts, or not giving full details of any loan arrears or other bad credit issues they may have had in the past.
Experian believe that we are likely to see a significant increase in the number of fraud cases, largely due to the fact that there is a distinct shortage of new self certification loans and bad credit loans available on the market and many individuals will be tempted to lie about their personal circumstances in order to obtain the loan they need.
A more serious threat is that of identity fraud, where a person’s identity is used fraudulently in order for someone to try and obtain a loan in their name.
Nick Mothershaw of Experian said “Attempted fraud is on the increase and the nature of that fraud is changing. Organised criminal fraudsters are moving into the mass market, looking beyond those with obvious wealth towards lower value but more vulnerable targets. At the same time, financial stress brought on by the recession is driving increasing numbers of people to commit fraud to maintain their lifestyles.”
