According to FICO, 25% of Indonesian and Thai respondents said there are circumstances when it is OK to exaggerate income on a loan or mortgage application.
In addition, 25% of Thais and 15% of Indonesians referred to lying on a loan application as normal.
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The results indicate that banks in Thailand and Indonesia may be making inaccurate application risk assessments, potentially leading to financial losses from inflated insurance claims.
FICO’s lead for fraud, security and financial crime in Asia Pacific, C.K. Leo, commented: “Our findings underline the importance of robust fraud prevention strategies in safeguarding customers’ interests and strengthening the bottom line.
“The rising costs of living and uncertain financial climate have driven some Indonesians to take drastic measures to obtain credit and other means to make ends meet”, Leo added. “However, misrepresenting information constitutes fraud. By enhancing their ability to identify overstated or false information, financial institutions can proactively protect themselves against losses caused by customers’ defaulting on repayments. In doing so, they can also support customers in avoiding regrettable outcomes.”
The cost-of-living crisis has pushed many to reconsider their finances, as borrowing costs have risen, forcing many to become heavily indebted to incumbent banks and BNPL providers.
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By GlobalDataAccording to another FICO study published in April, UK credit card customers missing at least one credit card payment was 41% higher than all account vintages in February 2023. Furthermore, customers with an established credit card account in February were 83% more likely to have missed two payments than on average.
