Aussies committing billions in fraud
A large number of Australians are committing billions of dollars worth of serious financial fraud and most culprits probably don't realise their crime.
Shock new research has revealed the extent of little white lies told on finance and insurance applications across the country, which could constitute criminal offences.
A study by consumer comparison website finder.com.au found an estimated 1.3 million people had omitted or embellished details when applying for credit or loans.
That equates to a whopping $220 billion worth of debt, including about 600,000 credit cards obtained under false pretences.
"That's a lot of finance that people might have otherwise not been eligible to obtain and the consequences can be very serious," finder.com.au money expert Bessie Hassan said.
When it comes to fibbing on applications, the analysis found four per cent related to credit cards, two per cent to car loans, another two per cent for mortgages, and one per cent for business loans.
"By lying about your circumstances, you can put yourself in financial strife by being approved for an amount higher than what you can service," she said.
"Overextending yourself can lead to enormous stress. You might be more likely to default and, depending on the fine print, could even face prosecution if you're caught."
Ms Hassan said the research also found eight per cent of car insurance policyholders - or about 1.5 million motorists - had told little lies when applying for coverage.
"That's pretty staggering," she said.
"It's a mix of white lies. It seems to be quite common for young people to insure their car in their parents' name to avoid age-related higher premiums."
In the event of a future claim, insurers will conduct thorough investigations to ensure everything is in order. They will often be able to sniff out lies, Ms Hassan said.
"Consequences can range from having your policy cancelled or having a claim denied to being sued for fraud."
Generation Y motorists are 10 times more likely to lie on car insurance applications due to age being a factor in determining premiums.
Jenny (not her real name) told news.com.au she insured her car in her mother's name and address several years ago to save money.
"I haven't really thought about it since," she said. "I should get around to changing it now that it doesn't cost me any more to have it in my name."
While the 32-year-old professional knew the fudging was not above board, she didn't realise she could face serious consequences if found out.
"I haven't had to make a claim, which I suppose is lucky now I know what's at stake," she said.
Some drivers are also applying for insurance with someone else's address if their own suburb has a higher break-in and crime rate.
Those with dodgy driving records could be obtaining policies in a partner or family member's name to avoid premium penalties, Ms Hassan said.
"Some people may not even realise that it constitutes insurance fraud - I suspect most don't realise how serious this can be," she said.
People who have told white lies on applications should contact their insurer and fess up now to avoid trouble down the road, she said.
"I'd encourage people to compare policies to ensure they're getting the best value for money. In a lot of cases, getting a better deal can mean you don't actually need to lie."