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Technology has made fraud more sophisticated; advisers must warn clients – Marketwatch

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  • 27/11/2019
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Technology has made fraud more sophisticated; advisers must warn clients – Marketwatch
For most advisers, when it comes to mortgage fraud the first thing that comes to mind is how they can detect a client's dishonesty when they apply for a mortgage.

 

However, fraudulent people posing as lenders such as Shawbrook and Castle Trust, as well as a Nationwide employee using customer details to make fraudulent bank transactions serve as a reminder that it’s important for advisers to also be vigilant about the criminal activity their clients may fall victim to.

So this week, Mortgage Solutions asked: How do you help to protect your clients from fraud?

 

Mitul Patel, mortgage adviser at Lemon Tree 

Clients don’t usually see these things unless they read it in the press somewhere.  

We tell clients is the usual thing, we do a fact find and ask for an individual password. If they’re communicating with us, it’s secure but also, we tell them what to expect during the mortgage process.  

We’ll tell them they will only really hear from us but if they hear from the lender directly, to let us know first. It’s very unlikely the lender will call a client directly unless it’s for a survey.  

So, if they get contact from anyone acting as a lender, they have been told to let us know. In theory, as a broker we should be managing their mortgage from start to finish and they should only ever really expect to hear from us.  

Sometimes there is external communication. Some lenders contact clients before a loan is drawn down, for example, to do a security check. We will already know about this so we can pre-warn the client that the lender will be contacting them.

In general, during our conversations with clients we tell them not to click on anything suspicious and to make sure their virus blocker is up to date. Anything we can warn them about, we do. 

 

Mike Owen, director of compliance and marketing at Diverse Advisers 

If suspicious activity takes place and a client mentions it to our advisers, they report that to me and we would make enquiries with the lender or supposed lender concerned. We will also inform the Financial Conduct Authority that we’ve discovered something and take it from there. 

I’ve never come across it personally but we need to make clients aware that this sort of thing can happen.  

I think technology has made fraud easier. We get all sorts of things all the time as a company, but we just ignore them.  

However, we do have to warn clients because unfortunately they can get stung. I know very intelligent people in high powered jobs who have been stung in the past.  

I think technology can also make it easier to detect fraud but that usually happens on our side of the process. There are some platforms being piloted that, with the client’s permission, a lender can go into a client’s bank account and pick out affordability signs and make sure it’s all legitimate.  

Equally that can lead to other types of fraud. If a lender’s got access to a client’s bank account, an unscrupulous employee can do something with that. 

There’s always a danger of that if you’ve got a bad apple working for a lender.  

 

Louis Down, digital marketing manager at HQ Mortgage and Finance 

We advise our clients to take fundamental precautions when it comes to preventing financial crime. Things like staying on top of your finances and knowing what’s going on with your bank accounts and credit report can allow you to spot suspicious activity as it’s happening. 

As a rule, never give up personal information or engage in a transaction without verifying the identity of the parties involved yourself. This can mean hanging up on a phone call and calling back on a number from an official website, it could also mean not engaging with an email and instead searching for the information it contains through official websites and your own online accounts. 

With so many fraudulent schemes making use of legitimate information to trick people, it’s vital to do your own research and only engage once you feel completely comfortable. 

If any suspicious activity takes place, the first step we take is to notify everyone involved and begin investigating the legitimacy of the activity. This involves reaching out to the relevant parties to collect information and determine how and why something has happened. It’s important also to record every step taken to ensure a clear audit trail for review. 

Technology has certainly allowed us greater control, awareness and access over our personal finances. But as technology advances, so too does the sophistication of financial crime.  

The net effect of technology appears to be a positive one, but it’s hard to imagine a world where the issue is ousted entirely. 

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