Nearly a quarter of young adults admit to bank loan fraud – Cifas research

• Latest research underpins consumer ‘acceptance’ of first party fraud
• 12% of adults say they or someone they know have deceived their bank
• Warning that fraud rules may unintentionally encourage more dishonest claims

Around 1 in 4 (24%) 25-34-year-olds have either lied to their bank or know someone who has in the last 12 months, claiming a loan has been fraudulently applied for so they avoid repayments. That’s according to the latest Fraud Behaviours Survey findings from UK-leading fraud prevention service, Cifas.

Additionally, as many as 1 in 10 (11%) 16-24-year-olds considered it a reasonable action, raising serious concerns about consumer attitudes toward financial dishonesty and its impact on the banking sector.

Presented with 10 different first party fraud scenarios in the annual Fraud Behaviours Survey, 2,000 UK adults were asked if they thought the actions described were reasonable or unreasonable, legal or illegal, and whether they themselves had done the same, or knew someone who had, in the last 12 months.

For this particular scenario, an individual had secured an unsecured loan for home improvements, despite being suspended from their job at the time of application. When their first payment was due, they falsely claimed the loan had been taken out fraudulently in an attempt to avoid repayment.

Overall, the survey found 12% of respondents admitted to having falsely reported a fraudulent loan application within the last 12 months, with 5% believing it was reasonable to do so. Meanwhile, 1 in 7 (15%) were unaware such deception was illegal.

In October 2023, the Payment Systems Regulator introduced new rules requiring Payment Service Providers (PSPs) to reimburse victims of an Authorised Push Payment scam when using Faster Payments. Under the rule change, liability for reimbursement is split equally between sending and receiving PSPs. Cifas has continued to highlight industry concerns that the ruling could exacerbate the ‘normalisation’ of first party fraud.

Mike Haley, CEO of Cifas, commented: ‘First-party fraud isn’t a harmless white lie – it carries serious consequences for perpetrators and the wider financial system. As our latest research suggests, some people would rather claim their loan has been fraudulently applied for rather than work with their bank on an honest solution.

‘As banks focus on reimbursing and protecting victims, there’s growing concern that regulatory changes could unintentionally encourage dishonest behaviour – the so-called ‘moral hazard’ – making tackling fraud an even bigger challenge.

‘Education is key to tackling first-party fraud. Many people don’t realise that falsely claiming a loan is fraudulent and isn’t just bending the rules – it’s a serious crime with real consequences. By raising awareness early, we can help individuals make informed, ethical financial decisions and protect the integrity of the banking system.’

Overall, nearly half (48%) of respondents said it was ‘reasonable’ to commit first party fraud. Learn more from the latest Cifas Fraud Behaviours Survey.

To help organisations strengthen their counter-fraud measures, Cifas provides a range of products and services, including:

• APP Victim Check – helps banks identify high-risk Authorised Push Payments that need to be paused and investigated, protecting customers from re-victimisation.
• Beneficiary Checks – provides fraud teams with a secure communication channel to verify concerns around potential fraudulent transactions.
• Vision – supports organisations in managing customer risk and monitors behavioural changes in real time.

ENDS

Notes to Editors

For more information, please contact Hayley Paterson, Cifas Press and PR Manager, on 020 4551 7072 or press@cifas.org.uk.

Survey methodology

The survey was carried out by Opinion Matters on behalf of Cifas with a nationally representative sample of 2,000 UK people between 22-28 May 2024.

About Cifas

Cifas is the UK’s leading not-for-profit fraud prevention service with over 775 members from across key economic sectors including banking, retail, insurance, and telecoms. Cifas protects businesses and individuals from fraud through the sharing of data and intelligence sharing between the private, public and third sectors. In addition to providing products and services which help businesses prevent more than £1.8bn in fraud losses each year, Cifas delivers specialist training through its Cifas Fraud and Cyber Academy and Digital Learning programme.

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About Opinion Matters

Opinion Matters is an independent market research agency that create bespoke market research solutions for businesses, organisations, and agencies worldwide.  Opinion Matters abides by and employs members of the Market Research Society which is based on the ESOMAR principles.

Contact us at press@cifas.org.uk