Loan fraud cases increase due to credit crunch
May 20, 2008
According to a recent report the level of fraud cases in relation to loan and credit applications has gone up as the result of the global credit crunch, which has made it increasingly difficult for consumers to get the finance that they need without resorting to omitting information off their applications, lying on their applications, or exaggerating information such as income. Worryingly, some of these lies may not be caught out, as another recent report indicated that a number of lenders were failing to carry out adequate checks when it comes to finance applications.
The global credit crunch has resulted in far tighter credit conditions in the UK, and this means that many people that may have been eligible for finance and loans a year or so ago may not be eligible any longer based on their circumstances. However, some consumers think that by lying on their application they stand a better chance of getting the finance that they are after, and this has resulted in a rise in fraud cases.
The information comes from the fraud prevention service Cifas, which stated that in the first quarter of this year this type of fraud increased by 10% compared to the same period last year. An official from Cifas stated: “Because people are getting into debt earlier, and because the credit crunch has diminished their access to finance, they are now resorting to fraudulent applications for funds.”
One of the most common lies according to officials was failure to disclose a previous address where the applicant was known to have bad credit. However, officials state that it is pointless to lie or withhold information on finance applications, because the data is shared by lenders and therefore there is every chance that the lie will be discovered. This will then male it even more difficult for the applicant to get finance in the future even if credit condition improve.
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