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Home > Mortgages > Mortgage Data

By Donia O'Loughlin | Published Aug 22, 2012

Attempted mortgage fraud jumps 23%, Experian

Attempted fraud in the mortgage industry jumped 23 per cent between April and June 2012, while fraud fell by 3 per cent year-on-year across financial services products in general, data from Experian have revealed.

Experian’s latest Fraud index reveals that 39 in every 10,000 mortgage applications were identified as fraudulent between April and June 2012, up from 32 during the same period in 2011.

Experian’s fraud analysis also showed the majority of attacks on mortgage products continue to come from first party fraudsters, specifically individuals misrepresenting their own circumstances.

Almost a quarter of attempted mortgage fraud was due to individuals hiding adverse credit information. A further 21 per cent of fraudulent applicants provided misleading employment histories.

Savings accounts saw a 109 per cent uplift in fraud rates over during the period, with a total of 13 fraudulent applications detected in every 10,000, up from 6 in every 10,000 a year ago.

Third party identity fraudsters were responsible for 88 per cent of fraudulent activity in this sector and 11 in every 10,000 falsified savings account applications were down to unrelated third parties. This kind of identity fraud is often perpetrated for money laundering or sleeper fraud purposes, Experian said.

Nick Mothershaw, director of identity and 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.”

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