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Mortgage fraud up 6% in the third quarter

Fraudulent attempts to obtain home loans rose 6 per cent in the third quarter, according to Experian.

Experian’s latest Fraud Index reveals attempted mortgage fraud rose six per cent in the third quarter, compared with the same period in 2011, rising from 36 to 38 in every 10,000 mortgage applications which are identified as fraudulent.

This increase means that mortgage fraud overtook current account fraud as the most targeted sector for the first time within the past year.

The global information services company forecasts a “dramatic increase” in the levels of attempted mortgage fraud in 2013, estimating a 13 per cent rise that would generate a total of 43 out of every 10,000 applications being identified as fraudulent.

First party fraudsters are set to initiate the majority of attacks through misinterpreting their own financial history.

Experian in the UK and Ireland director of identity and fraud services Nick Mothershaw says: “Almost 90 per cent of mortgage fraud tends to originate from genuine individuals misrepresenting their financial situations.

“With tougher rules on UK mortgage lending set to come into force in 2014, where lenders will have to put a borrower’s ability to repay under greater scrutiny, it important that they have the correct tools in place to do this, especially as attempted fraud in this industry is set to increase significantly over the next 12 months.”

Attempted insurance fraud rose 9 per cent in the third quarter, from 11 a year ago to 12 in every 10,000 applications.

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