Experian the information services company has released data to show that the UK mortgage industry experienced a 23% rise in attempted fraud rates between April and June 2012. Experian say that a total of 39 out of every 10,000 mortgage applications were shown to be fraudulent between April and June, an increase from the 32 cases recorded in the same period of 2011.
According to Experian, most fraud cases come from what they call “first party fraudsters”. These are people misrepresenting their own circumstances. Landlord insurance clients will know how important it is to be completely open and honest when dealing with lenders and insurers. The penalties for attempting to defraud a lender are severe and will probably mean the end of the fraudsters ambition to build up a buy to let business. If an insurance company proves fraud it will probably work with the police to bring a prosecution and of course any claims will be declined. Fraud detection systems are getting better all the time but too many people are still greedy enough to try to get away with it.
Nearly a quarter of attempted mortgage fraud was due to individuals hiding adverse credit information and a further one in five applicants provided misleading employment histories. Slightly better news for the credit industry comes from the financial services sector where Experian say that fraud fell by 3% year on year on financial services products with the car and insurance finance sectors seeing the biggest reductions in attempted fraud.