Fraudulent credit applications on the rise

Financial services firms have received more fraudulent applications so far this year than the later months of last year. According to research done by Experian, the number of these applications increased in number by over one-third in the first half of this year.

The analysis from Experian shows that roughly 19 people out of every 10,000 who applied for credit or some other form of financial service this year submitted a fraudulent application. This is a 33% increase from the second half of last year. According to the research, more people are attempting to get around the stricter criteria for lending that many of the banks have implemented.

As well, more people are attempting first party fraud. This means that they will try to avoid the truth about the status of their unemployment, or keep their unfavorable credit history hidden. Some people do this with the goal of gaining credit or some other type of financial product that the banks might not make available to them otherwise. It appears that first party fraud has taken over third party fraud this year.

Most of the people who attempted fraud this year were doing so for car financing, and it also saw the largest increase in the number of people who were attempting fraud. Numbers in this category have increased by over 35%, and now roughly 34 people attempt to submit fraudulent applications for motor finance out of 10,000.  For most people, they were trying to keep their adverse credit history concealed. Experts blame this increase on the simple sales process involved. Mortgage fraud has also increased this year since 2009.