More and more people lie when taking out a Credit Card or Bank Account

Date of Publication: Tuesday, 01 April 2008 15:19

Research by CIFAS - The UK's Fraud Prevention Service - reveals that more people are lying on application forms to obtain credit, insurance and other products; that they are getting into financial difficulty sooner; and are turning to fraud at an earlier age. The research looked at the application fraud cases filed on the CIFAS database, comparing the situation in 2004 with that in 2007. It found that the number of application fraud cases filed on the database rose from 62,000 in 2004 to 77,000 in 2007, an increase of more than 24%.

In each of these cases, individuals had told lies ("material falsehoods) on the application form, or had supplied false or altered documents to support their application. In 2004, just over one in every 10 fraudulent applications was successful, resulting in 7,200 cases where the fraudster obtained the product he or she had applied for. By 2007, that had risen to almost one in 5, resulting in 14,500 cases of the fraudster being successful.

Products where fraudsters have seen increasing success since 2004 include: bank accounts, plastic cards and to a lesser extent mortgages.

The lies most frequently told on applications include:

Lying to conceal a poor credit history. Fraudsters recognise that a poor credit history will affect the outcome of the application, but fail to realise that verification checks are made. More than 64% of the application frauds filed on the CIFAS database fall into this category.

Exaggerating the length of time the applicant was resident at an address. Fraudsters believe that stability increases creditworthiness but don't realise that verification checks are made. 13% of the application frauds filed on the CIFAS database fall into this category.

In addition, the use of false documents to support an application has increased considerably since 2004. The false documents most frequently used to support an application are passports, utility bills and bank statements.

In 2004, 68% of application fraudsters were men and 32% were women. Although by 2007 the shift was small, with 66% male fraudsters and 34% female, this was the first time that women represented more than one third of all application fraudsters.

In 2004, fraudulent applications from men tended to be for asset finance (mostly for cars) and bank accounts, women were more likely to apply for loans and plastic cards. By 2007, male fraudsters were more likely to apply for asset finance and insurance, whereas female fraudsters were more likely to apply for communications products (mobile phones) in addition to plastic cards.

The research revealed that the top five postal districts where male application fraudsters live are SE (South East London), then E (East London), B (Birmingham), N (North London) and M (Manchester).

For female fraudsters, the top five are: SE (South East London), then E (East London), B (Birmingham), G (Glasgow) and N (North London).

Tuesday, 01 April 2008 15:19
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