As the effects of the credit crunch are felt people are really looking closely at the state of their businesses and investments and one of the side effects is that an amazing amount of fraud is coming to light.
Jeff Salway wrote an interesting article in the Scotsman last week quoting experts as saying so widespread was the fraud that it is possible it caused the property meltdown. Mr Salway writes
“In December the Professional Negligence Lawyers Association claimed there was “no doubt” that large-scale, organised mortgage fraud at least contributed to or may even had caused the property market meltdown”
Frightening stuff really and perhaps even more scary are the claims that the full extent of the fraud that has been taking place since the credit crunch began will not even yet be known for some time.
Hitesh Patel, fraud investigation partner at KPMG Forensic, said: “As the global economic downturn takes hold and organisations look ever more closely at their operations, it is very likely that more fraud will come to light so that the real impact of the credit crunch on fraud is yet to be fully felt.”
It is believed that the easy credit conditions of recent years, when things were booming, created an environment where this kind of fraud could thrive. For example self certified loans that allowed the self employed to vouch for their own earnings opened the door for these kinds of fraudsters.
It is a shame really as it means banks are likely to wipe out these types of loans and they did work well for the genuine majority who used them. However, we can’t blame the bank for protecting themselves, the fault lies at the feet of the unscrupulous.
