Tips to Prevent Application Fraud

If posing as another person and using his personal information to make illegal transactions or draining the account is akin to identity theft, then so is using that information and applying for credit cards, mortgages, loans and insurances. The difference is that only gaining the personal information is not enough. The offenders also have to get their hands on the personal documents validating those information and professional scammers can go to any length to do that. These include bills, driver’s license, bank statements and passport. This job is much more difficult than just frisking a credit card or hacking into a database, but the offenders have managed to find a way out of the problem.

• Credit Card Application Fraud: This poses to be a greater problem than the loss of a credit card because in this case the bearer has his card with him for which reason he does not report any theft, and when the authorities come calling they have a hard time proving that the illegal transactions have not been made through that card as the card information matches totally. Not only does it seriously decrease the credit rating but it takes years for the victimized to clear his name from all charges. Moreover, it leaves the victim mentally exhausted.
• Mortgage Application Fraud: On the other hand, in the case of mortgage fraud the information on the mortgage loan application is erased or changed so that the offender would be entitled to get a larger loan. The accused if caught would face the same charges as money laundering and wire fraud and may be imprisoned for up to thirty years, but unfortunately hardly anyone gets convicted. Occupancy fraud, Appraisal fraud and Income fraud are the most common type of mortgage fraud and Predatory Mortgage Lending often co-exists with it. The offender gets his loan at a much lower interest than the current market rates.
• Precautions: The best way of protecting yourself from these scams is to take particular care of all your personal documents. Do not leave them lying around in open spaces like your workplace even if you are convinced that there are no dishonest people around. Keep changing all your passwords at regular intervals and shred all your documents in a shredder before disposing them, since the offenders even go through dumpsters and trash cans in the hope of gaining personal information. Check on the originality of the documents produced during a mortgage. Carefulness and acute observation is needed to outsmart these scammers.