In its thematic review of mortgage fraud against lenders, the regulator said it was concerned that some firms’ failures to participate in collaborative action undermined the efforts of the sector as a whole.
It said that while many firms highlighted the importance of information sharing to combat mortgage fraud, which include using the FSA’s Information From Lenders (IFL) scheme, many of the larger lenders were “still not fully engaged with IFL” and had only made few referrals.
The Council of Mortgage Lenders has responded to the FSA’s findings and said that its looking to work with the regulator and lenders to strengthen anti-fraud measures.
In particular, the CML said it will look to ensure that it helps the FSA to encourage good engagement in the IFL scheme, and other measures that help to improve collaboration and information sharing within the industry to help stamp out mortgage fraud.
CML head of policy Jackie Bennett said: “Prevention is better than cure, and information systems that help lenders to spot potential fraud play an important role.
“The pilot scheme from HM Revenue & Customs that enables lenders to cross-check prospective applicants’ income details was able to stop £111m of suspect lending in its pilot year. We look forward to the rollout of a fully-fleshed version of this scheme for all lenders soon.”
She added: “We are working extensively with the National Fraud Authority, the police, and lenders, to ensure that the right resources are in place to investigate and prosecute fraud.”
