KUALA LUMPUR, Malaysia’ A recent survey conducted by Fair Isaac Corp (FICO) has uncovered a growing trend among Malaysian consumers regarding the acceptance of misrepresentation on loan applications, notably dubbed liar loans. The findings highlight an alarming shift in perceptions related to income reporting, with over half (55%) of Malaysians indicating that they believe it is acceptable or normal to exaggerate income when applying for loans. This figure is significantly higher than the global average of 39%.
The survey further reveals that more than one in six Malaysians (18%) perceive it as socially acceptable to deliberately misrepresent income for mortgage applications. This rising tolerance for financial dishonesty marks a concerning shift in values, raising questions about the integrity of the lending landscape in Malaysia.
Respondents expressed that while exaggerating income might be common, misrepresenting income on mortgage applications is a worrying trend. ly, when it comes to fraud, falsifying insurance claims is still viewed as the most taboo form of dishonesty, with close to half (49%) of respondents ranking this as socially unacceptable.
The results of this survey come at a time when Fair Isaac Corp is reporting strong financial performance, achieving a return on average invested assets (ROI) of 37.88% in the third quarter of 2024 substantially above the company’s average ROI of 25.16%. However, this latest figure reflects a decline in net income compared to the previous quarter, suggesting adjustments ahead.
In the context of the Services sector, nine companies have reported higher returns on investment than FICO, leading to a progression in overall ROI rankings, moving up to the 70th position from 94th in the previous quarter. This upward movement is indicative of a strong competitive landscape, despite the challenges faced during this financial period.
The alignment of increasing tolerance for dishonest financial behavior alongside strong market performance presents a complex scenario for stakeholders in Malaysia’s financial sector. As the country grapples with these concerning trends, it remains to be seen how regulators and financial institutions will respond to ensure the integrity of lending practices and protect consumers from the risks associated with liar loans.
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