The government has sounded a warning to those who lie to secure home and car loans in South Africa. According to data from the South African Banking Risk Information Center (SABRIC), a non-profit organization made up of major South African banks, there has been a drastic increase in the number of fraudulent financial applications, reports Business Tech.
FRAUDULENT HOME AND CAR LOANS IN SOUTH AFRICA
Fraudsters and cybercriminals are exploiting banking applications. Image: iStock
Delving into fraud-related information provided by financial institutions associated with SABRIC (Capitec, Bidvest, Absa, Discovery Bank, FNB and Standard Bank), it says more fraudulent home and car loans are occurring in South Africa. Criminals are trying their luck to get large sums of money for South African home and car loans. Vehicle finance company Wesbank reports that the average value of financed cars is now R391,000 (from R387,000 last quarter).
And there has been one 53% increase in the number of fraudulent vehicle financing cases since the COVID-19 pandemic. The potential value of the loss of these criminal activities is valued at around R7.3 billion in the automotive industry. As The South African recently reported, a man was found guilty of fraudulently financing a Volkswagen Kombi through a reputable lender. Worse, the culprit was only given a R10,000 well A mere drop in the ocean compared to the vehicle’s value of almost 600,000 rubles.
HOW IS THIS HAPPENING?
Criminals pedaling dodgy loans are on the rise and banks are putting billions at risk. Image: File
Gauteng and KwaZulu-Natal (KZN) have seen the most uncertain South African home and car loans a 38% i 24% respectively. This represents more than half of the fraudulent applications reported nationally. Also, housing loan cases end up being very much around one million rand, as the average purchase price of a house is 972,000 R national, i R1.6 million in the Western Cape. Home loan fraud has increased 1.6%. Nearly 3,000 cases were reported with a potential loss factor rated at R3.4 trillion. The actual losses incurred were only R445 million. However, 12% of fraudulent home loan applications still went through. Once again, Gauteng and KZN were at the epicenter with 64% of the cases arising in these provinces.
IS THE ECONOMY SO BAD THAT SOME PEOPLE HAVE NO BUSINESS TO LIE?
Share your thoughts on the story below… Image: File
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