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Fraud protection and the international client – Marketwatch

  • 17/11/2021
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Fraud protection and the international client – Marketwatch
MPs called on the government to introduce an international investor register to stop overseas buyers from using UK property for economic crime, reports suggested.


At the same time, recent figures from the Consumer Financial Protection Bureau (CFPD) showed the proportion of homes in England and Wales owned by international buyers tripled to nearly 250,000 in a decade. 

So, this week Mortgage Solutions is asking: With the international investor market expanding, how do you keep on top of potentially fraudulent activity? Has the growth of foreign ownership made this harder? 


Richard Campo, managing director of Rose Capital Partners 

It’s a bit reactionary for MPs to call for laws to stop international buyers to use UK property to commit economic crime as we have very clear money laundering laws already. 

That aside, as a firm that works with a lot of wealthy international clients there are things we do before we onboard clients. I work on an old school ‘red flag’ system where anything odd raises a flag.  

Doesn’t mean you have to walk away, but you need to be fully happy with the information provided before you proceed any further. 

Firstly, apply common sense. This is all too often overlooked, but simple things like when you are discussing income and the client says “what do you need my income to be” can be a big red flag. Trust your gut. 

Secondly, do basic background research. Most companies and people have an online presence and that can be checked against what they tell you.  

Lastly, gather all documentation before going to the bank. 

As we are part of Primis, before we apply to a bank, we have access to a system from Onfido that checks for people with criminal records and also those who are a Politically Exposed Person (PEP).

If this isn’t an area a broker deals in regularly, I would recommend partnering with a firm that does. As if they misstep on the above, it can have very serious legal consequences.  

While the guidance and jurisdiction change over time, the principles do not. Fraud is fraud. 

A number of flags could be raised in the process and it doesn’t mean there is an issue, but you do need to be completely comfortable with a case as if not, it could be your last as an adviser. That thought has never left me. 


Ian Gray, senior partner and mortgage broker at Kinnison Finance

It’s true that the due diligence can be more challenging depending on the country that person comes from and how they acquired their wealth.  

The growth of international investment has made it harder. Especially because, every time an expose comes out in the media, the banks tighten up. 

We have a two pronged approach, we demand new clients give us a written statement as to the source of their wealth. Then we try to independently corroborate that with public information. If that isn’t available, we ask them to prove the source of their wealth. 

In some countries, the information is less visible which makes it difficult, but you can check countries against a corruption index. If a country is high on the list, we step up our efforts. We also scrutinise people further if they are linked to high profile people or government officials in that country. 

The second thing is that for most international buyers, we can only deal with private banks because retail lenders don’t usually lend to people who don’t live here. However, it helps that private banks are very rigorous with anti-money laundering rules, to the point it can be harder for clients to even open a bank account with them. 

A list of international investors could reduce financial crime because it can deter people from using UK property to clean their money. It’s not a catch-all solution but it would be a positive step.  

However, it could also make the UK less attractive to law abiding international buyers as they tend to be private about their investments. 


rob gillRob Gill, director of Altura Finance  

With the help of technology and other resources, it should be as easy to keep up with potentially fraudulent activity, if not easier. 

Standard procedures like know your customer (KYC) and checking proof of ID are paramount to us. Those are processes we place a huge amount of importance on. We do this with any client, both local and international.  

We carry out ongoing assessments with our advisers to make sure they’re fully abreast of changing anti-money laundering rules and regulations. They do annual tests and we did our last one quite recently.  

Another thing we make use of is electronic ID verification, It’s a huge boon to us as a business. We were using it for over two years before we had to start working remotely and once that happened, it became even more important.  

The system we use is ThirdFort, it works by generating a unique code for the client to enter when they download the app. They input their name, address and date of birth and their address is checked against an Experian database.  

It also does a sanction search, which is part of anti-money laundering rules. The client then sends a short selfie video and scans their passport to send to the system which can identify passports from numerous countries.  

For me that’s far more secure than your average adviser as many can’t identify a fake passport from another country. 

A list might deter crime, but it may not be something mortgage advisers would get involved with. Although, if it was made available to us then we could check it the same way we do with a sanction search. 


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