Like the ghost in the attic, it isn’t going away. If anything, we’re likely to see some forms of fraud – and conveyancer-led fraud in particular – increase if the economy spirals downwards.
In its latest Thematic Review the FSA asked lenders to collaborate and tackle fraud by sharing information with one another. Some progress has been made, but only fledgling steps.
At xit2 we’re keen for the mortgage industry to come together and rally behind an industry-wide scheme to tackle conveyancer fraud. Technology, and new-breed anti-fraud tools, have to be at the heart of any solution. To combat the threat posed by conveyancer-led fraud, which threatens reputations as well as balance sheets, the mortgage market needs an industry-wide solution.
Before this can become a reality, there a several significant barriers to overcome.
Lenders are terrified by fraud, to the point where many of them will only use small panels that are difficult for conveyancers ‘on the outside’ to infiltrate. This makes the selection of conveyancers something of a closed shop. Lenders defer to panel managers who will only select conveyancers they know and trust.
Alternatively, the construction of a national conveyancer database, based around anti-fraud technology, could provide an all-in-one solution. Our Lender Conveyancer Exchange is one such example of how an audit and fraud tool could be scaled-up to encompass the entire industry, provided it has the support of the mortgage community. In theory, this could be taken to a national scale. Admittedly, lenders would need to agree share their data if it is to work.
But whatever system is used, the mortgage industry needs help if it is to tackle conveyancer fraud effectively. The FSA Thematic Review and MMR both made it clear third party oversight needs to improve.
Mark Blackwell is managing director of xit2