Why lying on finance forms can seriously backfire

You might think a small lie on a financial application won’t hurt anyone. Maybe rounding up your income, downplaying a medical condition, or tweaking a few details to get a better deal. But the risks of being dishonest can be far bigger than you might realise.

How common is lying on financial applications?

New research from Go.Compare shows one in four people admit to deliberately lying on personal finance applications, such as credit cards, loans, mortgages and insurance policies.

That works out at almost 13 million people in the UK potentially giving false information to providers like insurers and lenders.

The research was based on a survey of 2,001 UK adults, and it shows that dishonesty crops up across a wide range of everyday products.

The products people lie about most

These are the products people most commonly lie on:

• car insurance (7%)
• credit card applications (6%)
• home insurance (6%)
• travel insurance (5%)
• life insurance (5%)
• health insurance (4%)
• pet insurance (4%)
• mortgages (4%)
• personal loans (3%)
• car finance or leasing (3%)
• gadget insurance (3%)

In other words, people are most likely to lie on products they use every day, often without thinking through the consequences.

What are people lying about?

Among those who admitted to being dishonest, the most common lies included:

• income - 21% admitted overstating or misrepresenting earnings
• how they plan to use the product - 16%
• the value of their home or belongings - 16%
• details about their home, such as occupancy or security features - 16%
• details about a vehicle - 16%
• personal details like age or medical conditions - 15%
• job title or profession - 14%
• lifestyle habits, such as smoking or alcohol intake - 12%
• pet details, including breed or health issues - 12%
• address - 11%
• marital status or number of dependents - 11%
• claims history - 10%
• convictions or driving offences - 10%

The risks of lying on financial applications

If you lie, you’re not just risking a rejected application. You’re putting yourself in a much weaker financial position overall.

According to Go.Compare, the consequences can include:

• your application being declined
• your policy being cancelled
• payouts being refused
• difficulty getting credit in future
• potential legal consequences if deliberate fraud is identified

How you can protect yourself

Go.Compare urges anyone applying for insurance, credit or finance to take a few simple but vital steps:

• read every question carefully
• answer honestly and accurately
• update your provider if your circumstances change

As Go.Compare puts it:

“Honesty protects your cover, your credit record and your financial security.”