Author: Lucrezia Miano
Making, duplicating and forging official documents to deceive legal controls and obtain a bank loan constitutes fraud. Documents can be modified or created by the fraudster. A document is modified if information has been added or removed, or a signature has been forged. However, fraudsters can also create new documents, trying to imitate the original documents. These illegal documents are created on the basis of publicly available documents and contain false information. The aim is to create a document that appears as authentic and credible as possible.
Loan fraud
Loan fraud is a significant problem for banks and other public institutions. This type of fraud occurs when an individual or organisation falsifies documents or provides incorrect information to secure a loan. Fraud can involve different types of loans, such as short-term, personal or student loans, and can result in severe losses for the bank. Deception may concern the identity of the borrower, income, or employment, but it may also concern the omission of other obligations. In addition, fraudsters can alter personal data and information to fit the criteria required to get the loan, and they can alter the valuation of the things they own, in fact if it turns out that the person has more valuable things they will get a higher loan.
Damages and legal consequences
Loan fraud not only harms the lending bank, but also the entire economic system. In addition to the loss of money, the bank also has to cope with the image damage that can result from having been a victim of this type of fraud. Furthermore, loan fraud undermines trust between the bank and the borrower. The penalty in these cases depends both on the jurisdiction and on the seriousness and modalities of the fraud. Depending on the seriousness of the offence, there can be a fine and even imprisonment in the most aggravated cases. Moreover, it is possible that the fraudster may face a civil lawsuit for damages.
How to realise that documents are altered and avoid fraud
To avoid scams, it is necessary to read all documents carefully before granting the loan. You have to check all the information and make sure that it is true, and you also have to check that there are no clauses disadvantageous to you that the fraudster has put in the document hoping you would not notice. In addition, to prevent fraudsters from using your personal information for documents to be used in the scam, make sure your personal information is safe and try to keep it confidential at all times. Finally, the bank can use technological tools to ensure that the documents provided by the borrower are authentic.
Real-life Cases
In the United States in 2019, there were loan fraud cases that were particularly notable for the harshness of the punishment that was applied to the fraudsters. In the first case, four entrepreneurs, in collusion with a loan officer, were ordered to pay more than £10 million in damages for engaging in loan fraud. In addition, they had to serve years in prison. In the second case, a man with a criminal record who committed loan fraud was sentenced to serve 10 years in prison.
Conclusion
In conclusion, it is important to understand the seriousness of this type of crime and to realise that loan fraud is common and great care must be taken to avoid it. Indeed, it is necessary to check that the documents presented by the borrower are not altered and do not contain stolen or inaccurate information. One needs to be very careful when checking documents because there are many ways in which fraudsters can alter documents to obtain loans illegally. Scammers can, for example, use a stolen or false identity but also change their income. These crimes severely damage both the defrauded bank and the entire economic system, which is why the penalties applied can be very serious.
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