Credit crunch 'causes credit fraud increase'

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Credit crunch 'causes credit fraud increase'

Mon 19th May 2008

Credit fraud is likely to increase in Britain as the credit crunch bites, according to the head of personal finance at Fool.co.uk.

David Kuo's comments followed research from the UK's fraud prevention service, CIFAS, which revealed that the number of people lying on applications for credit rose by 13 per cent in the first quarter of 2008.

He noted that many people are finding their personal finances are being "stretched" at the moment, leaving them without enough money to live on.

Mr Kuo blamed this trend partly on inaccurate inflation reports from the government, stating that while wages have risen by two per cent, the actual cost of living has risen by seven or eight per cent.

As a last resort, some people are turning to credit to try and "patch the holes in their budget", but many are finding their applications rejections as lenders tighten their criteria.

"I think what people need to do sometimes is if you have been turned down for credit, take a look in the mirror and ask yourself why," he suggested.

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