Attempted mortgage fraud up 37% in 2010

7 September 2010 | By Natalie Thomas

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.”

Readers' comments (14)

Anonymous | 7 Sep 2010 11:55 am
I personally believe that anyone seen to carry out this type of mortgage fraud should be kicked out of the industry and the person who has purchased the property should have their property taken away from them and also black listed for buying again.
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Anonymous | 7 Sep 2010 12:14 pm
This "research" is marketing from experian. Also the use of such an emotive term "fraud" is being misused to create a scaremongering headline. Somebody not disclosing credit issues is not fraud is it.
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Steve | 7 Sep 2010 12:35 pm
I am amazed at Experian giving out these figures as it demonstrates to me that their system cannot be very good at catching mortgage fraud. As mortgage brokers we know how many clients are prepared to lie on their application if it gets them the amount they want to borrow. If Experian with all their data only find 0.35% of applications are fraudulent then an awful lot of cases must be slipping through. Also, to say that fraud is more than double since Q2 2007 shows just how little lenders tried to find mortgage fraud back then rather than a real doubling in cases.
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John Reid | 7 Sep 2010 12:48 pm
What are you talking about... kicking brokers out of the market becasue their client does not confess to bad credit in their history. Get Real.... this is only 0.0019% of mortgage applications have been identified as fraudulent and please do not tell me that a client has never told you that they have a clear credit history only to find out once you have placed the mortgage and the lender does the credit check that this was not the case. We requested fromt he FSA in 2006 that Brokers should be allowed to do credit searches which would help in this not happening and would aslo help us to be abel to place a case with a lender correctly first time every time.
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Anonymous | 7 Sep 2010 12:48 pm
This highlights once again the lack of even the most simple security measures in place that led to the credit crunch.
Good riddance to the FSA.
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Anonymous | 7 Sep 2010 1:49 pm
To anonymous 12.14pm-not disclosing debt is fraud. Why lie unless you think you have something to gain! Sorry but you don't just forget about a car loan of £200pm or a card debt of £25k. You are misrepresenting yourself and therefore have commited fraud.
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Anonymous | 7 Sep 2010 1:54 pm
I agree with Steve (12.35) - this just shows how inept Experians systems are.
I await hearing how many of the 47000 repossessions last year were credit scored on Experian based systems!
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Anonymous | 7 Sep 2010 2:49 pm
Attempted Mortgage Fraud? Is that really a crime? They don't give a Nobel Prize for attempted Chemistry.....
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craig | 7 Sep 2010 4:29 pm
assuming reference agencies are upto date what does it matter if the applicant "forgets" to mention a commitment. In my opinion the fraud does not occur at application stage, its at completion. If some declares a 15K loan paying £200 per month and says they are paying it off, who is actually checking this is done. Even if its a condition of the offer not all solicitors are checking this.
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Anonymous | 7 Sep 2010 4:32 pm
Yes attempted fraud is really a crime! Just because these have been picked up by the underwriter/lender doesn't mean its not a crime.
In your world then, if someone shot at you, this wouldn't be a crime (attempted murder) Get a grip on reality!
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