23% surge in mortgage fraud

Published by Max Salsbury for 24dash.com in Housing and also in Finance, Legal

There was a 23% rise in attempted mortgage and savings fraud between April and June this year, new research has revealed.

For every 10,000 mortgage applications made in the period, 39 were identified as fraudulent, up from 32 per 10,000 in the same period in 2011.

The analysis also showed that the majority of attacks on mortgage products come from first party fraudsters - individuals misrepresenting their own circumstances.

Almost a quarter (24%) of attempted mortgage fraud was due to individuals hiding adverse credit information and one in five (21%) applicants providing misleading employment histories.

However, the findings - from global information company, Experian - did reveal an overall 3% drop in fraud year-on-year.

Financial services products with automotive finance and insurance providers witnessed the biggest decreases during the period.

Nick Mothershaw, Director of Identity & Fraud Services at Experian in the UK and Ireland, said: “Over the course of the last year, we have seen mortgages continue to be targeted at a high rate, with more people trying to misrepresent their personal, employment and credit information on applications to get properties out of their reach. At the same time, we have also seen an increase in the number of properties where the use of the property is misdeclared, such as applying for a regular residential mortgage on a buy-to-let property.

“Meanwhile, deposit taking products – such as current and savings accounts – continue to be heavily targeted by third party identity fraudsters for money laundering purposes and as a sleeper platform from which to target more lucrative credit products.

“Robust fraud prevention relies on thorough and efficient validation of customers’ identities and the information presented on the application form. It is vital that finance providers share comprehensive and timely information about finance applications and known frauds to help combat this common threat to the industry.”