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Causes of credit fraud boost in 2015 and methods of its prevention

02.04.2016

Modern frauds impress with the scale of their fantasy. They continuously create new and improve existing methods of extortion. Recently we have witnessed a boost of complaints from people suffered from frauds’ activity. Number of credit frauds increased by 100% in 2015.
One new scheme is deployed especially successfully. Crooks seize a victim’s passport to open a credit on. Whereupon, the law does not adjudge as a victim a person a loan was made out in name of.
 
Causes of increase in credit crimes
Today it is a fashion to attribute everything to the crisis. Banks strive to secure themselves from such troubles. In 2014 there were cut short 14,000 attempts to execute loans on outside passports. Last year the clear-up rate slumped to the level of 8,000.
Statistic data do not reflect the real picture. Last year number of victims increased twice; however, and it’s only the beginning. This financial year we can see a trend of increase in such crimes.
According to Pavel Medvedev (the financial ombudsman of the RF) rise in crime has its own reasons.
- Devaluation of national currency and decline in solvency of the population.
- Introduction by banks stricter standards on issuing credits.
This explains the fact that to carry out such frauds criminals choose micro-credit organizations and retail facilities offering credit arrangements for various products.
 
Crime mechanism and incapacity of law enforcement authorities
Criminals succeed in 24 hours not only to re-stick a passport photo but to pass financial institutions. A victim risks becoming a “lucky” holder of credits at different banks, with a 6-digit number as a total amount of repayment.
Here is a complex legal case. Police does not begin criminal tracking because it considers a bank as a victim. Legislative chicanery prevents law enforcement authorities from protecting interests of people. Many people apply to public prosecution offices or courts but without much effect. Practice proved incapability of these authorities.
 
Insufficient agility of the Federal Migration Service
To verify document authenticity and passport status credit organizations use the FMS database, which is updated with an extensive delay (up to 6 months). Frauds benefit from sluggishness of the resource and use stolen passports scot-free in various banks and organizations of the sector for loan arrangements.
Even if the problem of prompt updates of the FMS database is solved, victims and law enforcement authorities will face a new legal dilemma of accepting data from FMS by official authorities as the act of the law.
 
Criminal schemes
Some experts proposed rather interesting hypothesis on possible criminal links between frauds and employees of financial institutions. If to give a closer look, they are not groundless.
- It does not seem possible to obtain credit with fake IDs under conditions of development of modern banking technologies. Moreover, passports are equipped with additional protection mechanisms. It is quite complicated to re-glue a photo or fake a signature imperceptibly.
- Availability of documents cannot guarantee you from frauds because rather often all of us provide confidential data in various situations. For example, while purchasing goods or services. Each one of us may discover that he has a loan or installments assigned.
 
Banksarguments
Financial institutions affirm that they use all available means to uncover criminals.
- According to the statements of credit institutions’ representatives, fake documents are often indistinguishable from originals.
- Having discovered an unpleasant precedent, banks conduct an internal inquiry. When the fact of extortion is confirmed, the credit agreement is considered as “invalid”. User’s credit history is deleted from the database of the financial institution.
However, it is quite likely that bank shall insist on credit repayment for a victim in a judicial proceeding. Rather often such contracts are redeemed by collecting agencies which will annoy by regular phone calls.
You may get rid of annoying collectors in two ways:
- Filing an application to the Directorate for Consumer Rights and Health Protection, stating that you haven’t given the permission for transferring confidential data to third parties.
- You may purchase a new mobile number and a landline.
 
What to do in case of your passport loss
Following these simple rules will help you secure against extortion and credit frauds.

  1. Having discovered a passport loss you must quickly apply to a police precinct. The receipt for paying a duty for filing an application represents an efficient security measure for protection of your interests.
  2. Having received a new passport, you should file an application to a police precinct and a bank announcing that a credit was issued to an unauthorized person. You must keep receipts and written notifications about these applications.
  3. If a credit organization applies to the court, a victim must:
  • Clearly describe the situation to the judge and present listed above documents.
  • Apply for a graphologic examination.
  1. Write an application to the Directorate for Consumer Rights and Health Protection; if a bank sold a promissory note to a collecting agency, accuse a credit organization in disclosure of the confidential data, or simply purchase a new mobile number and a landline.
  2. Having received from the court the verdict of acquittal, a victim has to apply to the Bureau of Credit History and require removing the information on your insolvency from the database. In case of their refusal, you may demand clearing your name in a judicial proceeding.