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Surveyor fraud – a problem in waiting?

by: Mark Blackwell
  • 28/08/2012
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Surveyor fraud – a problem in waiting?
The CEO of Suntech has been forced to resign. As the biggest producer of solar panels in the world, the company should be a beacon of growth – a sustainable source of power for a new age.

The reality is much more controversial, and a significant factor is third party fraud.

A third party investor provided €560m worth of German government bonds in collateral, which could not be cashed-in successfully last month. Having uncovered the fraud Suntech may have to delay the release of its Q2 results.

For billionaire CEO Zhengrong Shi, the episode will end a 12 year career with the multinational company he founded. But management at all levels need to understand how serious a threat third party fraud can be to the reputation of their business.

Any organisation can become a victim. The fraud that brings down a multinational can bring down a sole-trader or medium-sized business.

In the mortgage sector, fraud by third parties often involves either surveyors or conveyancers. Fortunately, the risk can be reduced significantly by knowing exactly who you are dealing with. The best way to do that would be to only deal with verified partners who’ve been thoroughly vetted.

We’ve been working hard with our parent group, DIIG to create a single database of conveyancing solicitors. If used by the whole industry, it has the potential to create a national panel of trusted conveyancers.

However, while progress is starting to be made against solicitor fraud, shockingly there is still no equivalent database of trustworthy surveyors. This is something that needs to be put right immediately.

To minimise risk, companies must find out more about their third parties. Using a trusted technology partner will give better data and make processes more transparent. It’s an issue that must be tackled with more rigour.

As recent events show, third party fraud can topple any business leader – and surveyor fraud must be taken more seriously by the aspiring lenders and brokers of the next decade.

Mark Blackwell is managing director of xit2

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