Attempted mortgage frauds up 14%

Mortgage fraud increased by 14% in 2010, with first-party fraudsters responsible for 97% of cases.

Credit rating agency Experian said attempts at mortgage fraud rose to 32 for every 10,000 applications.

Frauds attempts typically involved individuals inflating the prospects or status of their employment and personal finances, not disclosing previous addresses or attempting to conceal an adverse credit history.

The rise is despite banks tightening lending criteria dramatically since the beginning of the credit crisis.

Nick Mothershaw, director of identity and fraud at Experian, says: “Fraud in the UK has been fuelled by the recession’s aftermath, and it is likely that financial services providers could see fraud attempts rise during 2011."

He says organisations must ensure they have the right defences in place to allow rigorous validation and verification of identities and information.

Last month, research by CIFAS, the UK's fraud prevention service, revealed that 69% of all mortgage fraud was introduced by brokers.

It attributed the high number to mortgage cases being conducted at a distance, with the adviser never meeting the applicant face to face.

Richard Hurley, CIFAS communications manager, said: "The threat of mortgage fraud has not gone away, and it must be viewed in its proper context as the latest in a series of changes that have taken place over several years."