Government has sounded a warning to those who lie to secure South African home and car loans. According to data from the South African Banking Risk Information Centre (SABRIC) – a non-profit formed by major South African banks – there’s been a drastic increase in the number of fraudulent finance applications, reports Business Tech.
FRAUDULENT SOUTH AFRICAN HOME AND CAR LOANS
Deep-diving into fraud-related information provided by financial institutions associated to SABRIC – Capitec, Bidvest, Absa, Discovery Bank, FNB and Standard Bank – it says more fraudulent South African home and car loans are taking place. Criminals are trying their luck to secure large sums of money for South African home and car loans. Vehicle financing company Wesbank reports that the average value of cars financed is now R391 000 (up from R387 000 last quarter).
And there’s been a 53% increase in the number fraudulent vehicle financing cases since the COVID-19 pandemic. The potential value of loss from these criminal activities is valued at around R7.3 billion to the automotive industry. As The South Africanreported recently, a man was found guilty of financing a Volkswagen Kombi fraudulently through a reputable lender. Worse still, the guilty party was only handed a R10 000 fine. A mere drop in the ocean compared to the value of the nearly R600 000 vehicle.
HOW IS THIS HAPPENING?
Gauteng and KwaZulu-Natal (KZN) have seen the most dodgy South African home and car loans at 38% and 24% respectively. This accounts for more than half of reported fraudulent applications nationally. Likewise, cases regarding home loans end up being well north of a million rand, as the average purchase price of a house is R972 000 nationally, and R1.6 million in the Western Cape. Home-loan fraud has increase by 1.6%. Nearly 3 000 cases were reported with a potential loss factor valued at R3.4 billion. Actual losses incurred were only R445 million. Nevertheless, 12% of fraudulent home loan applications still went through. Yet again, Gauteng and KZN were at the epicentre with 64% of cases arising in these provinces.
IS THE ECONOMY SO BAD SOME PEOPLE HAVE NO CHOICE BUT TO LIE?
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