According to a recent report the global credit crunch has had a significant impact on the level of consumers that are committing financial fraud by lying on applications in order to get loans and other forms of credit. The credit crunch has seen credit conditions become increasingly tight over recent months, and this means that many consumers could find themselves turned down for credit as a result of these tighter credit conditions.
More and more people have become aware of the problems that they face when it comes to getting credit, and as a result of this many are telling lies and putting false information on applications for credit in order to boost their chances of success. The information comes from Britain’s fraud prevention service, Cifas. In the first three months of the year this type of fraud is said to have risen by 13% compared to the first three months of last year.
One official from the agency said: "Because people are getting into debt earlier, and because the credit crunch has diminished their access to finance, they are now resorting to fraudulent applications for unsecured loans." The agency confirmed that the most common lie told on applications was the failure to disclose a previous address where a consumers had bad credit, which can obviously affect an applicant’s chances of getting credit, particularly in the current financial climate.
However, officials warn that it is pointless telling such lies and omitting information from applications, as the information is shared amongst lenders, and therefore the applicant is merely further reducing his or her chances of getting credit in the future. Watchdog groups are now calling for increased action to be taken over this type of fraud.