Since last summer, when the global credit crunch made its way to the UK, lenders have been increasing stringency when it comes to lending criteria, and have made it far more difficult for consumers to get finance, whether it is a mortgage, loan, credit card, or other type of finance. This has had a profound impact on consumer confidence and has also affected the economy, with consumers unable to afford to spend. Many people, particularly those with past credit problems, have suffered difficulties in getting credit, and those that have may have paid a high price in terms of interest rates.

However, some consumers are of the mind that omitting certain facts from their credit applications, telling a couple of lies, or falsifying information could help them to get the credit that they need, as it will make them look like a lower risk than they actually are. Officials, however, warn that lenders share information about applicants, and if the fraud is discovered then the applicant could be risking their financial future, as lenders will not deal with those found guilty of this type of fraud, which is logged on their credit file.

Industry officials from the UK’s fraud prevention service, Cifas, claim that in the first three months of this year fraud levels in cases such as these rose by 10% compared to the same period last year. Watchdog officials have been calling for increased action to be taken against this type of fraud. An official from Cifas recently stated: “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 funds.”

According to data the number of people telling lies on finance applications forms has risen from 19,239 in the first quarter of last year to 21,780 in the first quarter of this year. One of the most common falsifications on applications according to officials is failure to disclose a previous address where the applicant was known to have poor credit. However, whilst many consumers may think that this is the only way to get the credit that they need at a rate of interest that they can afford officials state that it is counter-productive and could make the situation worse in the event that the lies or fraud are discovered.

Recent additions:

• Lenders need to be more cautious
• The credit squeeze continues
• CAB still dealing with many debt enquiries
• Do your finances need to be restructured?
• How Is The Credit Crunch Affecting Building Societies?

Credit crunch leads to increase fraud on finance applications is a post from: Glitec Loans