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Trust your instincts on fraud cases, brokers urged

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  • 21/06/2018
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Trust your instincts on fraud cases, brokers urged
Mortgage brokers have been encouraged to trust their instincts if they feel there is something suspicious about a mortgage case.

Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, said that while the lender had “a number of robust procedures in place” to help pick out fraudulent cases, everyone involved in the mortgage journey had a role to play in trying to prevent fraud attempts slipping through.

He continued: “We would encourage brokers to be aware of potential scams and the ways criminals may try and commit fraud and to work with us to help reduce mortgage fraud across the industry.”

Fraud risks growing

Earlier this year the Conveyancing Association updated its Cyberfraud & Fraud Protocol for members, which includes updated definitions for the various different methods employed by criminals, warning that property fraudsters “will not stop” as they are enticed in by the large sums of money involved.

It followed a warning from Sir Geoffrey Vos, chancellor of the High Court of England and Wales, that the pace of technological developments posed a greater risk of fraud “than ever before”.

Jay Naylor, marketing director at PRIMIS and Personal Touch Financial Services said the most common type of fraud is linked to the mortgage application.

She added: “This type of falsification is usually connected to inflated or secondary incomes, with false documentation used to support it.

“As the quality of these forged documents gets increasingly sophisticated, it can be tricky to spot which records are counterfeit and which are real.”

 

What can brokers do?

Naylor said that often the only way for brokers to combat application fraud is to undertake broader due diligence checks on the applicant, “assessing the overall plausibility of the documents that have been provided”.

This is where the fact-finding process is particularly important, and that brokers need to double check the information they’ve been provided to ensure it accurately represents their client’s circumstances, according to Naylor.

She said: “Bank statements, for example, can be reviewed to ensure all expenses and bills are listed correctly, and other sources should be consulted to verify these outgoings.

“Take council tax payments, have these been estimated? The appropriate council website will provide the information needed to cross reference the figure.”

Accord outlined five steps brokers can take to ensure that they spot fraud cases

  • Trust your instincts – if something feels wrong, then question it. If they have nothing to hide, clients will likely respect you for going the extra mile to protect both your interests
  • Keep up-to-date – educate yourself on recent scams so you are aware of what tactics criminals may be employing, helping you to spot a potentially fraudulent case
  • Put controls in place – implement sufficient checks so that you can spot unusual activity
  • Don’t be shy – share your commitment to tackling fraud with clients so that they know you take it seriously and that it’s on your radar; this may act as a deterrent.
  • It’s good to talk – if you have any concerns about suspicious activity regarding a case you have already submitted, speak to the lender in question as quickly as possible.

A spokesperson for TSB suggested that brokers should think carefully about the valuers they work with in order to tackle mortgage fraud.

They added: “These are the boots on the ground and can spot suspicious activity at the property.”

 

The consequences for getting it wrong

A spokesperson for mortgage lender trade body UK Finance highlighted that lenders “take mortgage fraud very seriously” and work closely with law enforcement, regulators and other industry professionals to combat it.

They added: “Lenders will consider carefully the role of anyone involved in making a fraudulent application. That includes brokers, who may also face prosecution or disciplinary action if appropriate.”

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