Rachel Chitra | TNN | Apr 18, 2016, 01.01 AM IST
CHENNAI: Home loans, generally considered one of the safest lending products, are now witnessing a 50% increase in fraud with applicants coming up with innovative ways to cheat lenders. Fraud risk, however, remains the highest in the personal loan category, compared to other financial products.
The second most targeted category by fraudsters after consumer/personal loans are credit cards. While personal loans are generally perceived to have a higher risk associated with them as they can be availed without collateral or credit history, it is surprising that home loans, which go through multiple levels of check and scrutiny, still manage to have frauds.
The home loans category has seen an alarming rise in fraud. The number of cases increased 50% to 73 in 2015, up from 48 per 10,000 applications in 2014. And the most popular method of theft was seen to be 'stealing someone's identity', accounting for 85% of all detected cases. "We've known of cases, where employees steal the identity of their employer," says Mohan Jayaraman, managing director, Experian Credit Information Company of India Pvt Ltd and country manager, Experian India.
In another instance, Experian rejected a home loan application for 7 lakh because of fraudulent income tax returns (ITR).
When they received the application, most of the documents passed muster, but when it came to the income tax returns, Experian's fraud management system rang alarm bells, showing a negative match with a fake ITR filed.
However, cases of people giving fraudulent contact information, while applying for home loans, has declined to 11% in 2015 from 15% earlier, Experian data showed.