Loan Fraud Continues To Increase
There have always been issues over levels of fraud being committed when it comes to applying for a loan and a home owner loan or mortgage in particular. This can range from a potential borrower simply overstating their income in order to be accepted for a loan, right through to falsifying documents and even more serious fraudulent activities.
According to the latest figures from BDO LLP’s Fraudtrack, home owner loan and mortgage fraud accounts for around 20 per cent of all fraud cases in the UK. Almost half of all reported fraud cases relate to the finance and insurance sector and within this 36 per cent of all cases relate to home owner loans and mortgages.
The figures show that in the first half of this year, the level of fraud has increased significantly, with fraud losses accounting for more than £1 billion, which is much higher than the previous six months and almost the same level as the whole of 2008.
It is quite common to see level s of fraud and loan fraud in particular, increase during difficult economic conditions and recession as individuals use increasingly more desperate measures to be accepted for the loan they require.
BDO have predicted that fraudulent losses will continue to increase over the course of the year and it seems likely that there will have to be some additional, more stringent regulation within the loan and finance sectors in order to combat the rising problem.
Simon Bevan of BDO suggested that regulators were likely to “act tough” he said “We have a combination of political pressure and the understandable desire, in a downturn, for the public sector and corporates to be seen to have a zero tolerance policy. We are therefore likely to see increasing regulatory action.”
