Mortgage fraud set to rise in 2013
In 2013, 43 out of every 10,000 mortgage applications are expected to be identified as fraudulent, 26% more than in 2011, according to the analysis by Experian. The majority of fraud is likely to be perpetrated by applicants misrepresenting their personal finances, employment statuses or credit histories.
Experian UK and Ireland director of identity and fraud services Nick Mothershaw said close to 90% of mortgage frauds tended to originate from genuine individuals mispresenting their financial circumstances.
He said: “Increased fraud levels in specific industries mean that it has never been more important to ensure that applications for new credit facilities are analysed for signs of fraudulent activity.
“Simple steps organisations can take to mitigate risk include robust checking of new applications for credit using tools that reveal first party fraud and organised fraud rings, continually reassessing fraud risk across existing accounts and introducing true identity authentication using facts only a genuine applicant will know on all products, not just the higher risk ones.”
A Council of Mortgage Lenders spokesman encouraged lenders to use channels of communication such as Information from Lenders, where suspected fraud can be reported to the Financial Services Authority.
Lenders have become better equipped to identify first party fraud, he added.
“Because circumstances have changed in the industry there is a lot more checking and verifying of circumstances reported to lenders by borrowers than may have occurred pre-credit crunch.”