A chronic lack of data about third parties means plenty of fraudulent suppliers continue to operate under the radar.
Sadly, the Mortgage Market Review offered little guidance on how to reduce supplier led fraud using technology – despite the FSA’s Thematic Review stressing that third party oversight needed to improve if fraud is to be reduced.
It’s disappointing the MMR did not address the issue in more depth, because the mortgage industry needs better information about third party suppliers.
Supplier-led fraud is more dangerous to lenders and brokers because it tends to be more professional, and harder to detect, than first-party fraud. The industry needs to use anti-fraud technology to combat the threat.
The best anti-fraud tools deliver data about third parties in a single, easy to read format, making it easier to analyse panels work and spot fraudulent patterns.
It relieves the panel manager of distribution work and places banks in a stronger position to manage their third-party networks. Top anti-fraud tools enable risk directors access to large amounts of third party data.
In addition, data provided by technology providers can help them do manual checks on service quality more frequently.
Lenders and brokers must know more about their third parties. Using a trusted technology partner will give lenders better data about their networks, making the processes more transparent and helping the mortgage industry reduce supplier-led fraud.
It’s an issue that must be tackled with more rigour. Technology, and better data, is the answer.
Mark Blackwell is managing director of xit2
