In 2010, the City of London police gave Tracey Carr an award. It was their way of recognising the two years she had spent helping to unpick 33 fraudulent mortgage applications and tracing them back to a bogus solicitor firm. The culprit, Mohammed Asif Younas of Montague Mason Solicitors, was sentenced to eleven and a half years in jail for his £8m fraud that year.
Three years on, the award still sits on Carr’s desk. “That was a very proud moment,” she says, “Especially to think somebody had taken on board all my effort and hard work to bring the criminals to justice.”
“That’s probably the biggest case I’ve dealt with. Mortgage frauds are very complex – they involve various different parties and putting a package together for the police including witness statements and evidence takes a long time.”
Carr knows what she is talking about. She joined Santander’s mortgage fraud team from Barclaycard fifteen years ago, where her speciality was credit card fraud. Over the next decade she shot up through the ranks before crossing over to the bank’s risk division and taking on the role of financial crime manager.
Within the wider mortgage industry, Carr is seen as an expert on fraud. She represents Santander on the Council of Mortgage Lenders’ financial crime panel group. In March 2013, she also became the director of National Hunter, an anti-fraud data sharing system for the financial services industry.
“I do quite a lot of work in the wider industry because I truly believe that by working together collaboratively we will mitigate against industry fraud losses,” she says. “It’s no good working in isolation – that’s not going to help anybody.”
One area where lenders can benefit from sharing expertise is in payslip fraud. “There are websites available where you can order replacement payslips,” explains Carr, “And for a fee you can order payslips to order. Some of them are very good quality.”
Lenders cannot expect much help from the law. “Most of these websites are very clever,” she says. “They have disclaimers attached to them where the customer signs to say they’re not going to use the payslips to make fraudulent applications. That’s how they get round it.”
The picture can become murkier still when brokers are involved.
This is because many Financial Conduct Authority-regulated brokers will take business from informal, unregulated intermediaries.
“The message we give to the regulated brokers is, ‘Our contract is with you’,” says Carr. “If you accept informally introduced business then you are expected to do your own checks.”
This means knowing the source of the business: “Make sure you meet the individual, make sure you have written agreements and make sure you meet the client themselves face-to -face.”
She also has concerns about property clubs. In theory, the clubs alert novice landlords to available properties. The reality is often more crooked. Club members may inflate the real property price in order to obtain a mortgage without a deposit, or present a ‘deposit’ that is in fact a bridging loan which must be paid back after completion.
While in the case of informal intermediaries, brokers may be unaware they are helping a fraudster, property club frauds tend to rely on multiple conspirators. “In these types of transactions either one of the parties will be acting fraudulently, or it could be a combination of everybody,” says Carr.
“Usually the applicant knows exactly what they’re doing because these transactions will normally be presented as a residential purchase application when actually they’re going to be let out.
“Obviously if the solicitor isn’t taking a deposit then he maybe negligent or even complicit because he has to report that no deposit is changing hands. The mortgage broker may be involved with the property club as well.”
Lenders may be operating in the digital age, but it seems uncovering fraud still depends on identifying and removing crooked individuals. Perhaps because of this, the last two years has seen a shake-up of lenders’ solicitor panels.
Carr introduced accreditation requirements to the Santander solicitor panel. But she has also given solicitors a timeframe in which to adapt and called for lenders to share data on solicitor firms in order to make the process more efficient.
“My experience over the years has meant I can look at things from various different angles,” she says. “I put myself into the shoes of the solicitor or the broker because I’m very conscious that whatever decision we make in respect to their panel statuses could have a detrimental effect on their whole career. I very much want to make sure we make the right decisions.”
