There has been a sharp increase in fraudulent home owner loan, mortgage and personal loan cases in the UK over the course of the last year, compared with the previous year, according to a new report published by CIFAS.

CIFAS, the UK’s fraud prevention service, has just released a 48 page report which has shown that the number of fraudulent loan applications has increased by around 10 per cent in the last twelve months, above the figure for 2008.

According to the figures, there has been a steady reduction in the number of fraud cases relating to loan applications over the past few years, largely due to the declining housing and hoe owner loan market, but as we start to see some signs of recovery and improvement in this sector, so the incidence of fraud cases is also increasing.

Application fraud, where someone knowingly includes false information on their application in order to obtain a loan, such as declaring an inflated income level or not mentioning other existing loans, has actually decreased by around 25 per cent over the past two years .

However, there has been a significant increase in identity fraud, where someone has used another person’s details, or completely fictitious details, in order to try and apply for a new loan and the CIFAS report says that this area of fraud has increased by around 32 per cent in the last twelve months.

Peter Hurst of CIFAS commented on the reports findings, he said “At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified, but also reveal many of the problems and challenges ahead. This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of  fraud that, due to tighter lending criteria, never got as far as the fraud department.”