60% Indians Believe It's Normal to Exaggerate Income on Loan Applications: Survey

Three out of five consumers surveyed in India believe it is normal for people to exaggerate income on loan applications, according to a report on people’s attitudes toward first-party financial fraud.

The survey by global analytics software company FICO stated that more than a quarter (27%) of Indians believe it is normal for people to deliberately misrepresent their income on mortgage applications.

“Three in five consumers (63%) think it is OK or normal for people to exaggerate their income on loan applications, significantly more than the global average of 39%,” the survey said.

More than half (54%) believe it is normal to falsify insurance claims, the global survey which examined 1,000 people in India said.

Many Indians consider it fine to exaggerate income on personal loan applications, further complicating financial integrity.

Just one third (33%) of consumers believe it is never acceptable to exaggerate income on a personal loan application, while another third (35%) finds it acceptable under specific conditions.

“With over 60% of Indian consumers viewing income falsification as acceptable or justified, banks face a very real problem of ‘liar loans’ that could skew risk assessment and increase bad loan rates,” said Aashish Sharma, APAC segment leader for risk lifecycle and decision management at FICO.

As many 1,000 Indian adults were surveyed, along with approximately 12,000 other consumers in Canada, U.S., Brazil, Colombia, Mexico, The Philippines, Indonesia, Malaysia, Singapore, Thailand, U.K. and Spain.

Globally, attitudes are notably different, with the survey revealing the majority of consumers (56%) firmly reject the idea of exaggerating income on loan applications, viewing it as never acceptable. Just, one in four (24%) consider it permissible in certain circumstances, and only one in seven (15%) view it as a normal practice, the report said.

“Many consumers may not see this as harmful behaviour, but it’s important to understand that when applying for financial products, applicants typically certify that the information they provide is accurate,” Sharma said.

Another report by FICO in July this year highlighted that Indians have a low tolerance for inefficient digital experiences when opening an account via a mobile app or website.

It showed that more than half (58%) expect to answer 10 questions or less or they will abandon a personal bank account application. One in four (26%) will drop out if asked more than five questions.

(With agency inputs)