There were 37% more attempted mortgage frauds in the first half of 2010 than in the second half of 2009, according to Experian’s latest Fraud Index.The majority of cases involved applicants misrepresenting their situations or attempting to hide adverse credit histories in their applications.
The percentage of mortgage fraud also continues to steadily increase, despite dipping slightly in Q3 and Q4 2009. Some 35 out of every 10,000 applications received were identified as fraudulent, more than double the 16 in every 10,000 during Q2 2007, when the economy was more buoyant.Experian however saw automotive fraud rise by 35% in the first half of 2010, overtaking attempted mortgage fraud in the second quarter to reach its highest level since early 2006.
According to Experian’s latest Fraud Index, which highlights the evolving nature of fraud threatening the UK’s financial services sector, 19 in every 10,000 applications received by financial institutions in the first half of the year were identified as fraudulent –33% more than the second half of 2009.First party fraud overtook third party identity fraud during April to June as the most common form of attempted fraud.
First party fraud typically involves individuals attempting to hide adverse credit histories or misrepresenting their employment status to try and secure credit and other financial services which might not have been suitable for them.Nick Mothershaw, director of fraud and identity solutions at Experian, says: "Our analysis shows that the increase in attempted mortgage and current account fraud underlines that providers need to invest to manage the risk of fraud and its potential impact on profitability."
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