Fraud awareness is a crucial part of our business, as fraudsters develop more sophisticated means to commit crime.
Technology is moving at a fast pace with increased online activity throughout the industry, so bridging companies must employ a more robust and savvy approach.
Use speed to pressurise
In terms of measures used to prevent fraud, we carry out rigorous underwriting and identity checks on all clients. We also use a panel of selected valuers and professionals for any specialist advice and reporting.
Undoubtedly the biggest risk is identity fraud. Proof of identity and anti-money laundering (AML) due diligence are essential pre-completion.
Speed is one of the main areas where we excel, but that is often a tactic fraudsters use to pressurise a lender to complete.
It’s vital, therefore, to meet and get to know the client to support automated AML checks. Lenders and lawyers should not shy away from asking further questions if something just does not add up.
Brokers also have their part to play in this and can help reduce their exposure with some simple steps:
- Meet the client at their home.
- Take a photo of the client holding their ID – this can be very useful if there are issues at a later date. It will also deter them if they are committing a fraud.
- A fraudulent document may be difficult to identify by most people. There are online AML providers that can verify serial numbers and in some instances carry out high level checks on the authenticity of the document.
- Has their solicitor dealt with them previously? In particular if they are trying to raise funds against an existing property.
Another high-risk area is where an applicant attempts to raise capital on an unencumbered property, not legally owned by them.
In certain scenarios additional checks are required to confirm the original property purchase.
This has been highlighted in the recent cases of P&P Property v Owen White & Catlin, and Dreamvar (UK) v Mishcon de Reya and others.
Both these related to frauds against unencumbered properties where there were discrepancies with the address of the purported owner of the property – both could have been prevented if further due diligence had been carried out.
The industry has undoubtedly taken notice of these cases and they keep us focused and vigilant.
On a broader scale, as a sector, we are increasingly working together and collectively there are a number of joint measures, including anti-fraud networks for information sharing.
We are members of a number of financial associations where lenders share knowledge and best practices, so we can continue to combat fraud.