Insurance claims negotiator stole £140k through fake cases
Damian McMenzie, 36, from North Tyneside yesterday received a two-year suspended sentence for fraud by abuse of position at Newcastle Crown Court.
He had worked as household claims negotiator and exploited access to his employer’s systems to defraud the company.
McMenzie started working for the insurer in 2011, managing reports of household damage from clients, as well as agreeing settlements and processing payments up to £10,000 without seeking further authority.
However, he reviewed the system to find genuine claims that were approaching the end of their lifespan. Once he had located a suitable claim, McMenzie would add a further payment directed to his personal bank account.
In order to process payments higher than his personal £10,000 limit, McMenzie later confirmed in an interview that he gained access to his supervisors’ passwords by looking over their shoulder while they logged into the system.
The offences were discovered by colleagues when a customer reported that they had not received the payments associated with their claim on the system.
A review was conducted into the computer system, which uncovered over fifty payments that were all made to the same bank account in McMenzie’s name.
The case was referred to the City of London Police’s insurance fraud enforcement department (IFED) by the company for investigation.
During an interview with IFED officers, McMenzie admitted to the offences in full, explaining that the money was used to clear ‘payday’ loans which he had taken out to cover losses from gambling.
Detective constable Deborah O’Loughlin-Whitby, from the City of London Police’s insurance fraud enforcement department, said: “McMenzie faced financial difficulties because of a gambling addiction and should have sought help, rather than defrauding his employer and deceiving fellow colleagues who had trusted him.
“The outcome at court for this case reasserts that insurance fraud will not be tolerated by law enforcement, or the judiciary system, no matter the reason behind the crime.”
LLLE: Interest-only mortgage borrowers ‘are growing opportunity for advisers’ – Thompson
Ben Thompson, deputy chief executive of Mortgage Advice Bureau, told the audience that the outlook for the later life market was strong after a challenging year impacted by the pandemic.
He described how the driving forces for customer taking later life lending products has changed and will continue to do so in the coming years, in his session ‘Lessons from lockdown’.
Thompson highlighted the increasing number of interest-only mortgage coming up to the end of term, with this trend set to peak in around 2032.
He said: “As an advice community we need to probably adapt to recognise and spot those changes and those opportunities in particular. Whilst many people will sell a property or move or downsize or repay through their own resources, there will be a huge amount of people who won’t be able to do that and will need a later life product.”
Thompson said there’s also an opportunity to work closer with traditional mortgage advisers who have these customers on their books to provide the later life solutions that could help these borrowers.
In 2020 there were around 60,000 interest-only mortgages set to mature, owing an average of £104,000 and with equity averaging £387,000, according to Thompson’s presentation.
He said: “It’s a real opportunity for those in the market for today and clearly it’s going to get bigger still.”
Thompson also examined how shortfalls in pensions and care costs will also help drive the later life market in the coming years.
Separately, the issue of vulnerable customers was highlighted in the presentation.
Thompson said that during the pandemic, advisers have had to make sure advice is relevant to the longer term, as well as shorter term – and recognise when people may be taking products for the wrong reasons.
And in the future, the needs of vulnerable clients are going to keep growing.
Thompson said a deeper fact-finding questions to pinpoint the genuine reason for taking products, are among the changes that may be needed to meet the needs of these customers.
He added: “We have an increasing responsibility as an advice community to completely adapt to recognise and help vulnerable customers.”
In the live questions after the session, one delegate asked how advisers can better protect themselves from claims made by family members further down the line if capacity or lack of understanding is challenged.
Thompson replied: “I think that the regulator, lenders and intermediaries need to work incredibly closely to ensure they can be no future, retrospective recourse from customer/family to adviser, so long as the right processes have been duly followed… Customers need more choice, product and advice – we do not want an industry frightened of helping customers if they are unduly worried about future claims.”
You can register to watch the Later Life Lending Online Event here: https://www.mortgagesolutions.co.uk/events/later-life-lending-event/venues/register-online/
Presentations will be available to watch for 30 days after today’s event.
Together promotes Sundeep Patel as part of sales team shake-up
He starts his new role this week and takes responsibility for an experienced team to build further opportunities with the specialist lender’s key partners.
At the same time, Paula Purdy, who joined Together as a regional accounts manager in 2019 has been promoted to sales manager for the North, with Tanya Elmaz mirroring the role in the South.
Between them, they will be responsible for eight account managers working across the UK, and will report to Patel.
Joanna Elton has also re-joined the lender as a specialist distribution manager in the North and Midlands, having previously worked for Together as a business development manager.
It comes after Together last week announced the appointment of experienced industry professional James Briggs as an account manager for the North, within the sales team.
Patel has been with the company since 2018, raising the company’s brand profile to brokers and specialist distributers, particularly in London, as well as creating and implementing the business’s intermediary relations strategy.
He said: “I’m personally delighted to have been recognised for my efforts since joining Together two years ago. It will be something of a fresh start following the disruption within the industry because of Covid, and I’m looking forward to growing the business based on prudent lending, strong relationships and providing great outcomes for the key partners we work with.
“I believe in a one team ethos with motivated colleagues who are all committed to the same strong values and that is what we have at Together. It’s a real positive for the business and bodes well for the future.”
Marc Goldberg, commercial CEO at Together, added: “We are delighted that Sundeep has now taken up his new role to head up the intermediary sales channel and build further opportunities to drive our business forward.”
HSBC cuts dozens of mortgage rates including high LTVs
The lender has reduced the cost of two-year standard fixes and two-year fee saver fixes, and the five-year equivalent ranges.
Rates on the two-year term tracker have also reduced at selected loan to values (LTV).
It means the lender now offers a five-year fix of 1.64 per cent at 75 per cent LTV with a £999 fee, as well as a 90 per cent LTV two-year fee-free fix of 3.59 per cent.
And a two-year tracker at 75 per cent LTV is available at 1.69 per cent.
In total 30 mortgages have had rates reduced.
HSBC UK’s head of buying a home Michelle Andrews (pictured) said: “Despite the obvious challenges, the housing and mortgage markets are quite lively.
“This rate cut by us, with 11 mortgages reduced by 0.30 per cent or 0.40 per cent, including those at 90 per cent LTV, means getting onto or up the property ladder with HSBC UK, has become more affordable.”
Lenders preparing for busy remortgage market in 2021 – LMS
Instructions for remortgage are up 7.7 per cent month on month, but completions have fallen by 13 per cent, data from the group showed.
The most popular reason for a remortgage was to save money, with the average borrower lowering their repayments by £236.
Around half of remortgagers increased their loan size, according to LMS.
With the purchase market expected to come off the boil when the stamp duty holiday ends in March, remortgages are tipped to pick-up.
LMS chief executive Nick Chadbourne (pictured) said: “December’s data shows that instruction volumes are increasing again, following a fall in November which was largely fuelled by more borrowers opting for product transfers.
“It is promising to see this uplift, but high levels of PTs paired with record numbers of purchase transactions continue to impact overall volumes resulting in a lower number than what we would expect to see in December.
“We anticipate a reversal of 2020 trends in the second half of 2021, with remortgages taking the lead as the purchase market slows.
“There are signs that lenders are planning for this switch, reintroducing 90 per cent loan to value products and increasingly competitive remortgage products. Some savvy borrowers are already cashing in here, with our data showing borrowers who are shopping around for the best deals are decreasing their monthly payments by an average of £236 a month.”
Maria Harris joins advisory board of blockchain property network
The former director of intermediary lending head of Atom Bank (pictured) will be on the board alongside Rob Hailstone who is founder of Bold Legal Group.
Coadjute aims to halve the time it takes to move home through “simpler, smarter” and more secure transactions.
The blockchain platform enables buyers, sellers and professionals involved in the property process to synchronise events and alerts in real-time, and securely share messages and confidential documents.
The advisory board will be chaired by Dan Salmons, chief executive of the network.
Harris is a non-executive director at United Trust Bank, a technology adviser for Brightstar, and consultant for Twenty7Tec.
Coadjute said further appointments to its board will be announced in February.
Salmons said: “I’m delighted to welcome Maria and Rob to the Coadjute Advisory Board. Between them, they bring a wealth of experience in the mortgage and conveyancing industries respectively and share our passion for innovating to connect the property market. Coadjute’s network is set to become a National Grid for the market, and Maria and Rob’s expertise will be invaluable to help us set priorities that best address the needs of the property professionals they know so well.”
Harris added: “The mortgage industry has been on the precipice of true digital transformation over the last few years, but we need to take that final leap of faith. Coadjute not only gives us the technology to make this a reality, but it also facilitates the step change in industry culture and mindset, we need to collaborate effectively. I’m so excited about what we’re about to set in motion and the difference it will make to us and our customers.”
First-time buyers need extra £10k for deposit after Covid
The average amount put down by a first-time buyer in 2020 was £57,278, compared to £46,449 the year before, a rise of over 23 per cent, according to research by Halifax.
It comes as the average price paid by a first-time buyer in the UK last year was £256,057, up by £22,939 from £233,118 a year earlier.
London saw the biggest monetary increase in the average price paid over the last 12 months, up by £33,486 from £455,611 to £489,098.
Overall the number of first-time buyers fell by 13 per cent last year, according to analysis by Halifax.
But this was largely during the first half of 2020 as the property market closed. In the second half, activity bounced back with transactions down two per cent compared to the same six months of 2019.
First-time buyers made up around half of homes bought with a mortgage – a similar level to the previous year.
Regionally Northern Ireland saw the biggest fall in first-time buyers with a 23 per cent decrease, while London had the smallest reduction with a dip of six per cent.
Russell Galley, managing director of Halifax, said: “Whilst these figures confirm the almost inevitable fall in the overall number of first-time buyers in 2020 – with the entire housing market effectively shuttered during the first national lockdown – they also underline just how strong the bounce back was in the second half of the year.
“Despite the obvious challenges presented by soaring house prices, not least the need to raise an even bigger deposit, first-time buyers still accounted for half of all home purchases, a reassuring statistic given their overall importance to the market.
“However, with the economic impact of the pandemic likely to be felt most keenly by the young and those in lower-paid jobs, the need to prioritise improved housing availability and affordability for all those looking to make that first step onto the property ladder becomes ever greater.”
Equity release used to shore up finances against the pandemic
Almost a third of plans were used to refinance a mortgage, while a fifth went towards unsecured borrowing and a further fifth were used to help wider families, according to equity release adviser Key.
In total, £755m was transferred between the generations in 2020, with 43 per cent of these gifts earmarked for housing deposits and 26 per cent for an early inheritance.
Overall plan sales dropped by 12.5 per cent, while total value of equity released dipped 4.4 per cent.
However, the average amount released increased by 9.2 per cent from £77,735 in 2019 to £84,919 last year.
Loan to values remained at a similar level year on year at 26 per cent, while average interest rates fell to 2.8 per cent in Q4, down from 3.15 per cent in the same period a year earlier.
Drawdown remained the most popular product during the year accounting for 70 per cent of all sales.
Wil Hale, chief executive at Key (pictured), said: “While 2020 is down on 2019, the fact that we have only seen a 4.4 per cent drop in the value of equity released suggests that customer demand remains strong supported by the efforts of advisers, lenders and other service providers in this challenging year.
“Discretionary spending has fallen as equity release increasingly looks to support clients’ aspirations to help their families and make their finances as resilient as possible by refinancing debt.”
Hale added: “With the end to the stamp duty holiday on the horizon, it is also not entirely surprising to see that many older homeowners have taken the opportunity to pass wealth down the generations and help children or grandchildren onto the property ladder.
“While this may change as we head into 2021 and the holiday comes to an end, I suspect the desire to help families will remain a strong driver of this market in years to come.”
Foundation adds staff to handle stamp duty surge and meet 2021 targets
The lender has added to underwriting, new business and sales teams which will also help provide a smoother process for advisers and their clients.
At the start of the year, the specialist lender employed seven new experienced underwriters, after underwriting assistants, processing team members and completions staff also joined the team.
The number of people working in the new business team has now increased by 45 per cent, with many staff remotely recruited and working across the UK, Foundation said.
Foundation’s sales team has also been boosted by new starters, as well as promotions for existing staff, while the lender brought two new internal business development managers (BDMs) in January and a new sales support team member.
At the same time, David Wheatley and Patrick Ogrigri have been promoted to regional account managers in London and South Central respectively and will be looking after intermediaries in those regions.
Sarah Wade was also promoted to head of marketing, with responsibility for driving Foundation’s marketing in 2021 and beyond.
The new recruitment means that, by the end of January, total headcount at Foundation will be up 17 per cent versus the same point last year.
George Gee, commercial director at Foundation Home Loans (pictured), said: “Ensuring we have all the resources required within the business in order to support our adviser partners, and to help us move forward as a lender, has been a key focus over the last few months, and we’ll continue to recruit and promote as required across all teams.
“The next couple of months will undoubtedly be busy from a completions perspective as we work to ensure as many cases as possible can complete before the stamp duty deadline, but we certainly don’t view this as a temporary arrangement.
“Last year was a highly successful year for Foundation and, as a result, our lending ambitions have grown for 2021. It’s why we’ve also increased the numbers and experience within our underwriting and sales team to support the ongoing demand that advisers are seeing in the specialist residential and buy-to-let sectors.”
Banks expect mortgage repayment defaults to rise in 2021
The end of mortgage payment holidays, as the economic impact of the pandemic hits households could be among the reasons lenders indicated in the Bank of England’s credit conditions survey that they anticipate an increase in default rates at the beginning of 2021.
However, banks tipped the availability of mortgages to increase in the first three months of 2021, according to the poll carried out in the final quarter of last year.
In the survey, banks said mortgages became more expensive at the end of last year but are set to fall in price at the start of this year.
Borrowers with higher loan to value (LTV) ratios of more than 75 per cent are expected to benefit from a wider availability of mortgages.
The end of the stamp duty holiday is widely expected to take some of the steam out of demand in the coming weeks, meaning lenders could potentially expect to compete harder for remaining borrowers.
Demand for remortgaging is forecast as increasing at the start of 2021.
Sarah Coles, personal finance analyst at Hargreaves Lansdown warned that the winter has sent a chill through the banks, as the impact of the pandemic starts to bite.
“More people are set to fall short on mortgage and credit card payments, while an outbreak of cold feet in the property market is likely to mean less demand for mortgages for house purchases,” she said.
“The heat is coming out of the housing market as the stamp duty holiday draws to a close, and much of the pent-up demand has worked its way through the system. But there are also signs that bleaker aspects of the pandemic are starting to make themselves felt.
“Some homeowners have worked through the pandemic with their income unscathed, but enormous numbers saw their income cut as they lost work or went onto furlough. Some of them made a Herculean effort and somehow stayed on top of their bills.
“Others have done all they can, and taken every available payment holiday, and are still struggling. At the beginning of this year, the high street banks expect them to start defaulting on mortgage payments.”
John Goodall, chief executive of Landbay, agreed that demand was likely to ebb away.
He added: “The key driver for the increase in demand for house purchase borrowing in Q4 2020 was the stamp duty holiday. It does not surprise me that demand is likely to fall in Q1 this year as buyers will no longer benefit from this tax break.
“I agree with the data showing an expected rise in remortgage business during the start of this year. We are experiencing high levels of applications in the buy-to-let space and expect this to continue over the next few months.”