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Mortgage fraud drops sharply in Q2 as account and loan scams soar

  • 26/08/2021
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Mortgage fraud drops sharply in Q2 as account and loan scams soar
The rate of mortgage fraud dropped sharply in the second quarter, even as bank account and loan frauds grew, Experian has said.


The rate of mortgage fraud fell by 17 per cent in April to June, compared to the previous three months, the credit checking agency told Mortgage Solutions.

Mortgage fraud was down 19 per cent compared to Q2 2020, with the quarterly figure the joint-lowest in three years.

The picture for mortgage fraud contrasted sharply to the situation for bank account and loan fraud.

For accounts and loans, fraud ballooned by 40 per cent in Q2 against Q1. These frauds hit their highest quarterly rate for three years and reached 66 per cent above the same period last year.

Experian said the low level of mortgage fraud was difficult to explain, but could relate to improved checks at application stage.

“It could be that fraudsters are looking at other products, like accounts and loans, as opposed to mortgages,” a spokesman said.

“Similarly, lenders can now better and more accurately assess people’s information and affordability at the point of applications, helping them to identify questionable applications at the beginning of the process,” he added.

The rise in account and loan frauds was ascribed to fraudsters using accounts to facilitate other criminal activity and by improvements to technology that has let banks identify fraud more easily.

The loan fraud rate particularly is expected to stay high over the coming 18 months as cases come through of criminals targeting the Bounce Bank Loans Scheme. 

On the mortgages side, banks’ experience of pandemic schemes has been more positive, with many now releasing funds set aside against possible defaults, as borrowers have started up repayments again after the expiry of pandemic payment holidays. 

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