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April 19, 2012

Mortgage application fraud up 8%

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by Gill Montia

Mortgage application fraud up 8%

Fraudulent applications for mortgages increased by 8% in 2011, according to Experian.

Last year was the fifth in a row to see a rise, with 34 in every 10,000 mortgage applications found to be fraudulent, compared to just 15 in every 10,000 in 2006.

The vast majority (93%) of cases were down to individuals misrepresenting their personal information and typically these first-party frauds involved falsifying employment status or financial information and / or attempting to hide an adverse credit history.

Experian’s demographic insight also reveals that young, poorly-educated individuals living in small towns and middle-aged, middle and skilled working class people were responsible for around 15% of first-party cases in 2011.

Young, well-educated professionals also made their mark, with around 13% of mortgage application fraud detected down to this group.

Experian’s UK&I director of identity & fraud, Nick Mothershaw, comments: “It is vital that financial service firms accurately validate and verify the identities of the people they interact with and use every technique at their disposal which includes validating income claims and checking for signs of an adverse credit history.”

He adds: “This is essential to restrict the significant damage fraud can do to the bottom line.”


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