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Archive for Fraud

Buyers tempted to lie for loans

Wednesday, November 21st, 2007

Many homeowners are being encouraged by their brokers to lie about their income in order to secure large mortgages. To lie about your income in order to secure a loan is a punishable offence and could land you with a hefty fine or even a jail sentence.

The whole story revolves around a care worker employed by the citizens advice bureau who claims she was advised by her broker to lie about her salary when trying to secure her mortgage.

Sandra Ashcroft, 59, told her bank she received a £35,000 salary as a mid-wife in order to secure a home loan of £102,000 in 2003. She then applied to increase that mortgage to £122,000 after telling the bank she earned £80,000 working in the public services. Ms Ashcroft actually only earned between £3000 and £5,500.

What Mrs Ashcroft did was highly illegal and she was charged for obtaining money transfers by deception. She was given a six-month suspended sentence but the judge said that there was evidence to suggest that she had been steered towards giving misleading information.

The danger often lies with the temptation offered by self-cert loans and mortgages. These were created for self-employed workers or business owners who don’t always have records of their income. Whilst these loans are vital for those who have an income that doesn’t come from a salaried job, they open a window for people to try to obtain credit they cannot repay by lying on their application.

So if you are thinking of lying on an application for a mortgage or even if your broker is encouraging you to lie do not be tempted. This is a very dangerous route to take and if you are caught out you could face losing your house, ruining your credit rating and even a jail sentence. So always consult the mortgage company or even a lawyer if you are unsure about specific details on your loan application form.

Posted in Borrowing, Consumer Credit, Consumer debt, Financial products, Fraud, mortgages, Personal loans, Property, Secured loans, UK Finance | No Comments »

Old Credit Cards – Credit Fraud Risk

Monday, October 1st, 2007

Identity fraud is a growing concern in the UK with many Britons falling victim and costing the economy an estimated £1.7 billion a year.  One way that people can fall victim is by leaving unused credit card accounts open.  According to Apacs, at the end of 2006 31.5 million people in the UK held an average of 2 personal credit and charge cards.  However, according to the research there are around one in three cards that are no longer active, which can cause concern for some.  One reason why someone may no longer use a credit card account is because they originally opened the account to take advantage of the 0% interest on balance transfers and once the balance was paid off they never used the card because of the high interest rate, or because they transferred the balance over to another 0% credit card once the offer has expired.  This means that there are many people who are moving their balances from one account to another account and often forgetting to close the account once it is no longer in use.

If you fail to cancel your cards once you stop using them you may end up forgetting that you ever had them.  Often if your account has no activity you will most likely end up not receiving a statement to remind you of the account.  So if someone gets a hold of your information and changes the billing address, you will easily miss that and fall victim to identity fraud.  Once someone has your details they can easily go further and take out expensive personal loans or even mortgages in your name. Typically these fraudsters will very quickly default on payments, leaving the black marks on your credit record. Often the first you will know of the matter is when you yourself are turned down for loans or mortgages.

One way of protecting yourself is by checking your credit report, and if you find in-active accounts listed on your report, then you should close them the ensure you do not end up a victim of fraud.

Posted in Bad Credit, Borrowing, Card fraud, Consumer Credit, Consumer debt, Credit Card, Credit record, Fraud, Identity theft, mortgages, Personal loans, UK Finance, Zero percent cards | No Comments »

Fight Fraud

Friday, July 27th, 2007

The devastation caused by mortgage fraud is becoming a major problem in the UK. It costs lending companies and homeowners millions of pounds each year. However, most of it cannot be prosecuted, because many of the fraudsters are from foreign countries that do not collaborate with UK enforcement authorities.

Mortgage fraud takes many forms, including stealing property using various methods of deception, obtaining a money transfer by deception, signing mortgages, and selling third party homes.

Victims are left with no hope of proving that they were not involved in the scam and are accused of hide the proceeds of the scam. Most victims hope that they are protected by banks and loan lenders, but sadly this is not always the case.  Many people have been left with 40 year mortgages in their name and what appears to be a history of bad debts and defaults on secured loans.

The Department of Productivity, Energy and Industry (DPEI) closed a buy-to-let scam, in 1995, which promised to help investors make money in the property market.  Three companies linked to the scam ended up at the High Court, following confidential investigations by the DPEI.

These companies took “substantial sums of money” and promised that they would help clients to build a portfolio worth £1 million a year.

In 2005, DPEI Minister Gerry Sutcliffe said: “These companies knew that their clients, who had all invested substantial amounts of money, couldn’t make anything like the returns that were promised. The schemes were completely misleading and set up with the sole aim of parting people from their money.”

Consumers are warned to avoid any investment scheme that promises too much, or very little risk. They are also warned to avoid anything that asks for personal information before explaining the company’s intent.

Posted in Bad Credit, Banking, Borrowing, Buy to let, Consumer Credit, Consumer debt, Financial news, Fraud, Homeowners, House buying, Housing news, mortgages, Personal debt, Property, Rental property, Secured loans, UK Finance | No Comments »

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