According to a report by credit information company Experian, consumer loans in India face the highest incidence of fraud followed by credit cards,.
- Theft is the most common type of fraud.
- “Identity theft/fictitious identity cases continue to contribute around three-fourth of all detected fraud cases. The category has observed a rise from 75 percent in Q1 2014 to 77 percent of fraud cases as of Q1 2015,” according to the report, titled ‘Fraud Report 2016- Retail Banking, India’.
- The number of fraudulent cases for consumer loans has increased annually from 219 frauds detected per 10,000 cases in Q1 2014 to 265 cases per 10,000 as of Q1 2015.
Credit Card Frauds
- Credit Card is the second most targeted product by fraudsters after consumer loans.
- The number of fraudulent card applications has increased annually, from 65 frauds detected per 10,000 cases in Q1 2014 to 75 cases per 10,000 as of Q1 2015,.
- The Income Tax Department has also taken note of the rise in fraud cases, particularly identity fraud cases, and recently issued a notification urging taxpayers to never divulge sensitive information over email or SMS.
Auto loan Fraud
- Auto loans are another area that has seen a rise in the incidence of fraud.
- The number of fraud cases to do with auto loans rose from 39 per 10,000 cases in Q1 2014 to 46 in Q1 2015. Identity theft is more rampant in the auto loan sector, with identity theft making up 85 percent of all auto loan frauds.
- The most common means of fraud in these identity theft cases is falsifying address proof or contact information.
- The recommendation made by the RBI to link all credit accounts to a biometric identification such as the Aadhaar will help creditors and lenders verify their borrower’s details including their contact information and past utilisation of credit.
Ctsy: The Hindu