Fraudulent credit applications soar
The number of fraudulent applications received by financial services firms soared by a third during the first half of the year, research has indicated.Around 19 out of every 10,000 applications for credit or other financial services was found to be fraudulent during the six months to the end of June - 33% more than during the second half of 2009.
The rise was driven by an increase in people lying on application forms in a bid to get around the strict lending criteria now employed by banks and building societies, according to credit reference agency Experian.
The group said so-called first party fraud - under which people attempt to hide an adverse credit history or lie about their employment status to try to secure credit or other financial products that would not otherwise be available to them - overtook third party fraud during the second quarter of the year.
Car finance saw the biggest increase in attempted fraud during the first half, with the number of fraudulent applications that were detected jumping by 35% to reach their highest level since early 2006.
The group said 34 out of every 10,000 applications for motor finance were found to be fraudulent during the six months to the end of June, with the level soaring to 47 out of every 10,000 in the second quarter.
Nearly two-thirds of attempted car finance fraud involved people trying to conceal adverse credit histories in their applications, while nearly one in five involved inaccurate employment details.
Nick Mothershaw, director of fraud and identity solutions at Experian, said: "As our analysis shows, fraud within the UK's automotive sector is rapidly increasing.
"The growth in this area can be partly explained by the high value assets on offer that can easily be converted into cash, but the complexity of the sales process is also a factor. For fraudsters, this makes it a comparatively easier target than other finance providers."
Mortgage fraud rose during the first half of the year, despite decreasing during the final six months of 2009.
The group said 34 out of every 10,000 applications for motor finance were found to be fraudulent during the six months to the end of June, with the level soaring to 47 out of every 10,000 in the second quarter.
Nearly two-thirds of attempted car finance fraud involved people trying to conceal adverse credit histories in their applications, while nearly one in five involved inaccurate employment details.
Nick Mothershaw, director of fraud and identity solutions at Experian, said: "As our analysis shows, fraud within the UK's automotive sector is rapidly increasing.
"The growth in this area can be partly explained by the high value assets on offer that can easily be converted into cash, but the complexity of the sales process is also a factor. For fraudsters, this makes it a comparatively easier target than other finance providers."
Mortgage fraud rose during the first half of the year, despite decreasing during the final six months of 2009.
© 2012 Press Association