Application Fraud in the Consumer Credit Market

Today, credit is being more readily offered, notably to higher risk segments of the population, as credit granting institutions seek out new areas in which to expand. In the emerging markets particularly, companies may not be particularly well versed in good credit risk and fraud assessment practices. As a result, credit grantors face an increased risk of application fraud. Application fraud can be defined as the submission of a fraudulent credit application in order to obtain credit goods or services through deception. This can include indicating that time at current address is longer than it really is, or that one’s salary is more than it actually is. Another type of application fraud is called identity fraud, where an individual purposefully uses someone else’s personal details, such as name and employer, without their consent, for the purposes of obtaining credit.