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How brokers tackle mortgage fraud: ‘There is no greater detective than a crinkly, grey haired adviser’

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  • 11/09/2019
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How brokers tackle mortgage fraud: ‘There is no greater detective than a crinkly, grey haired adviser’
Falsified documents were the biggest source of mortgage fraud in 2018, a report from Cifas published in June showed, replacing the misstatement of income as the most common discrepancy.

 

The report also showed that during the year, the sector had seen an 18 per cent decline in mortgage application fraud to 2,386 cases so while the problem seemed to ease, the amount of money lost makes it an issue that continually needs tackling.

In an effort to further combat this, Paradigm Mortgage Services recently put together an e-book for brokers, aiming to educate them on how to identify fraudulent practices among clients.

With all the experience, existing knowledge and training already in the industry, what resources do brokers find the most useful for combating fraud and how do they employ those skills?

Martin Stewart, founder and director of London Money, said: “Any form of education whether it is for a client or for a broker can only be a good thing for the wider industry.

“No one is infallible against a well-orchestrated fraud and we all need to remain vigilant to the threat,” Stewart added.

Stephen J Douglas, adviser at SJD Financial recalls his firsthand experience of a client who he discovered was lying to him when he spotted fake bank statements and pay slips.

“I called him [the client] out on it and he just kicked off out the office.”

Asad Khan, consultant mortgage broker at Mortgages for Business, shares his own encounter, saying he has had scenarios where he entered a client’s details into the Post Office’s certification system which flagged up past convictions and discrepancies.

However, he adds that with all the checks and balances within the trade, it’s usually something that gets picked up before it goes too far.

“Lenders are really smart anyway they’ve got their own internal barriers before you even get to that point,” he said.

 

Falling back on experience

With 37 years in the trade under his belt, Douglas puts his due diligence to use when he comes across anything that may be suspicious. “I’m quite fortunate, my daughter designs security for passports and money all around the world so I know about that stuff.”

He also makes use of the technology available to him, in the form of a fraud checker installed on his computer as he adds: “I just search and print a Financial Conduct Authority (FCA) file on every single person I deal with, so I get a full report.”

Khan also makes use of the software available to him as he runs all client information through an internal anti-money laundering (AML) checker, which he says gives his company “an extra level of due diligence”.

 

A wealth of resources

Preferring face-to-face interactions over written information, Khan says: “When you’ve got a document – brokers and compliance don’t really go together – it’s just one of those things that if you can, you tend to ignore.”

Philip Clark, owner of Philip Clark Financial Services, believes that any information available is bound to help, “if it means that we’re all as aware as we would like to be, articles and pointers are very helpful.”

London Money’s Stewart adds: “Fortunately, there is plenty of information available to us all on the internet be that LinkedIn, Companies House or the myriad of social media platforms which allow a diligent broker to investigate the evidence placed before them.”

Personally, he makes sure to attend training sessions held by lenders to keep on top of new fraud trends, but he also adds: “There is also no greater detective than a crinkly, grey haired adviser who has more years of experience than he cares to admit.”

 

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