“Fraud is a growing concern for all lenders, as fraudsters develop more sophisticated means to commit crimes. We are continually developing new sources of data checks to verify clients, as specialist lenders sometimes have no ‘face-to-face’ contact with customers when deals are originated via brokers,” said Rachel Davis, underwriter at Bridging Finance Solutions.
Davis said it was imperative to work with trusted partners and to have robust checks in place to pick up any inconsistencies that could identify potential fraud.
“Undoubtedly the biggest risk for us at the moment is identity fraud,” said Davis. “Therefore proof of identity, and anti money laundering checks are vital. We have come across cases where an applicant attempts to raise capital on an unencumbered property that they do not legally own. Therefore, in certain scenarios additional checks are required to identify the owners and when the property was purchased.”
Roy Armitage (pictured), head of credit at Lendinvest agreed fraud was a constant concern for the market and one which it could never afford to ignore.
He added: “It is something we take very seriously at LendInvest, which is why this year we became a member of CIFAS, the UK’s leading fraud prevention system. That membership means that we have access to the fraud data collected by industry, police and government agencies, as well as channels to fraud departments across the financial services industry.”
At an industry level better collaboration will help make it more difficult to commit fraud and Davis welcomed the database created by the Association of Short Term Lenders to record potential issues with valuers, borrowers and brokers.