Credit cards: Fraud rates rise for financial services
Financial application fraud rises 24%
Thursday, 13 Mar 2008 10:24
More Brits are lying on financial application forms for mortgages, insurance and loans as face-to-face meeting between firms and customers fall.
The UK fraud prevention service Cifas reveals the number of application fraud cases filed rose from 62,000 in 2004 to 77,000 in 2007.
Nearly one in five fraudsters were successful – from one in ten three years ago – meaning 14,500 slipped through the system.
People are now turning to fraud at an earlier age and are lying about previous financial difficulties hitting their credit ratings.
Cases of fraud do not include mistakes made by applicants, but lies on forms or false or altered documents used to support applications.
The most common areas where fraud occurs is in opening bank accounts, obtaining credit cards and to a lesser extent mortgages.
The most common lies were to conceal a poor credit history – accounting for 64 per cent of cases – as people try to hide previous financial problems they know will stand against them.
Some 13 per cent of fraudsters lied about the length of time they has lived in a property – believing a longer time at a property will make them seem more creditworthy.
Kate Beddington-Brown, Cifas head of communications, said: "This research also reveals some deep seated socio-economic problems.
"With the increasing number of people lying to hide a poor credit history, and the fact that the age of application fraudsters is decreasing year on year, it is clear that people are getting into financial difficulties and turning to fraud earlier."
Two-thirds of fraudsters are men – most likely to lie when applying for car finance or insurance – while women were more likely to commit fraud applying for mobile phones and credit cards.
Women were also found to be swapping between married names and maiden names in a bid to appear more credit worthy.
Cifas chief executive Peter Hurst added: "Those who think that lying on application forms will give them any advantage need to realise that their efforts are counter-productive.
"Fraud data sharing means that such lies are easy to detect and, far from enhancing an applicant's chances, will be detrimental to their application.
"Telling the truth, even if it is slightly less palatable, remains the best policy."