Lenders beware: The borrowers you think you’re lending to may not be who they say they are.
More and more people are using someone else’s identity to obtain a mortgage loan, according to the Federal Trade Commission.
In an annual report announced Tuesday, the government agency said its complaint database received 635,173 consumer fraud complaints in 2004, up 17% from the prior year’s total.
For the fifth consecutive year, identity theft was the most common form of fraud, representing close to two-fifths — or 246,570 — of last year’s complaints. The second most pervasive form of fraud was through Internet Auctions, accounting for 16% of the cases, followed by Shop-at-Home/Catalog Sales, the report said.
While credit card, utilities and bank fraud were the most common form of identity theft, loan fraud ranked fifth with nearly 15,000 complaints — of which approximately 3,000 alleged the information was misused for real estate loans.
In 2003, when ID theft complaints totaled 215,093, stolen data was used on approximately 2,200 real estate loans, according to the analysis.
The monetary loss of fraud victims was reported at more than $547 million.
“These are real people who have lost real money and the FTC offers them a direct link to finding a solution,” said FTC chair Deborah Majoras in the announcement. “By filing complaints, consumers are one click away from thousands of law enforcement partners who can help restore their good name, protect their financial security, and give the FTC the information we need to stop fraud in its tracks.“
Of the 80% of fraud complaints that reported how they were initially contacted, more than half indicated it was through Internet solicitations — 35% e-mail and 22% on the Web, the government agency reported.
The FTC said its complaint database has received more that two million fraud and identity theft complaints since its launch in 1997. The database is accessible to more than 1,200 law enforcement agencies — including every U.S. state attorney general and also consumer protection agencies in 19 nations.
