Mortgage fraud attempts up

Nia Williams

March 1, 2010

CIFAS, the UK’s fraud prevention service, has today released Fraudscape, a 48-page report that lays bare the frauds recorded by the 265 CIFAS Members during 2009.

As for mortgages, the report says: “The last few years have seen a steady decline in the number of mortgage fraud cases that have been identified. This coincided with the decline in the housing market, one of the most prominent features of the recession. Declining house prices had the effect of deterring serious fraudsters from attempting to obtain property for profit and those individual fraudsters attempting to obtain a mortgage that they may not be able to afford (fraud for property). 2009, however, has seen an increase in the number of mortgage frauds attempted. Notably, the increases are in identity fraud and misuse of facility fraud, while application fraud continues to decline.

“The implication of the reduction in application fraud is that the opportunist (property) fraudsters are still hesitant about over-stretching themselves in the current climate. But examination of the number of cases recorded in each quarter clearly shows that those identified have been increasing as confidence begins to return to the housing market.”

Fraudscape analyses fraud data, by type of fraud committed and product targeted by the fraudster, and presents some key findings:

  • Total frauds increased by nearly 10% in 2009 compared with 2008.
  • A 32% increase in identity fraud (where a fraudster applies in the name of an innocent victim or uses an entirely fictitious identity) has been driven by identity fraudsters targeting bank accounts, communications, and mail order products.
  • Application fraud (the use of material falsehoods – lies – on applications or false documentation) has decreased by over 25% from levels seen in 2008.
  • The ‘typical’ victim of identity fraud is still the man in his forties, though the increase in women being impersonated, or having their accounts taken over, indicates that now, as never before, anyone can be a potential target.
  • Bank accounts, communications and mail order are the product types with the greatest proportionate increase in fraud in 2009 compared with 2008.

Peter Hurst, CIFAS chief executive, commented: “At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified but also reveal many of the problems and challenges ahead. This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS Members, there is an additional and unquantifiable volume of fraud that, due to tighter lending criteria, never got as far as the fraud department.

“The findings presented in Fraudscape, however, clearly demonstrate the benefits that mutual collaboration brings. By sharing knowledge and pooling resources, CIFAS Members have prevented millions of pounds of fraud year after year and also increased the knowledge of the methods used to defraud businesses, consumers and society equally. This approach can only bring further benefits if further cooperation and responsible data-sharing takes place across all sections of society.”

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