The rate of fraudulent cases has been rising very quickly, to the point of doubling in five years.
The latest report based on Experian data has revealed that the rate of mortgage and insurance fraud has risen to 38 cases out of every 10,000 applications as of last year in the United Kingdom.
This is over double the rate of the fraudulent claims that was recorded in 2007.
The insurance fraud has been rapidly increasing since the start of the economic downturn and the credit crunch that was associated with it. The ongoing belt tightening that has been occurring among the budgets of homeowners is being blamed with its continuation. Experts from a credit reference agency have stated that they believe that this squeeze on the finances of households will probably bring on even more false claims.
Experian data indicates that though financial product insurance fraud as a whole has dropped since 2007.
However, it is in specific areas, such as mortgage coverage, where there have been large increases in the number of false applications, which have led to insurance fraud. It is in these areas where the numbers are rapidly on the rise.
The information from Experian has indicated that while the rate of fraudulent applications mortgage applications was 38 out of every 10,000 applications last year, the year before that figure was 35. In 2007, it was only 18 cases out of every 10,000.
At the same time, out of every 10 cases of fraudulent activities, nine had to do with the deliberate creation of a false image of personal circumstances in an individual’s application. The most common activity was an attempt to hide a credit history that was not favorable. There were also a large number of false statements that were made about the applicant’s financial circumstances or employment status.
Experian explained in its report that the cases of mortgage and insurance fraud were at their highest among the skilled working-class, middle-aged, and middle class demographic. Over that same period of time insurance fraud cases increased by more than double. In 2007, the rate was 5.44 cases for every 10,000 policies. This rose to 12 by last year.
Within this industry, 86 percent of the cases of insurance fraud involved the individual’s activities while filling in the application for coverage, or making a false or inaccurate claim.