Be vigilant against rogue introducers, brokers told

13 February 2012 | By Tessa Norman

Intermediaries are being urged to be vigilant about who they accept business from, following a spate of recent fraud cases involving introducers.

John Malone, who represents brokers on the National Fraud Authority’s Mortgage Fraud Forum, says while referrals are a conventional means of garnering business for brokers, there has been a worrying trend of brokers accepting leads from unscrupulous introducers.

He says: “A lot of introducers in the market these days have an industry background as a master broker or a packager, so are unauthorised but have retained a circle of clients. They may introduce this business to a broker, which exposes them to fraud as the broker may rely on the introducer’s word rather than meeting the borrower face-to-face.

“In an even more toxic scenario, some introducers who have a cosy relationship with a broker are putting the case through themselves using the broker’s Financial Services Authority number.”

He adds: “This is a serious concern and the majority of fraud cases I have seen in the past three months have involved an introducer.”

Alan Cleary, managing director of Precise Mortgages, says that while some introducers are legitimate, brokers should be particularly wary of using those they do not know as this exposes them to an unquantifiable risk which could wreck their career.

He says: “Some of these people have left the industry but still get mortgage-related calls, while others have had their licence removed and are looking for ways to submit business.

“I would advise brokers to be wary of introducers, no matter how good the deal looks, as there will always be unscrupulous people willing to ruin
another¹s career for their own financial gain.”

Andrew Bloom, managing director of Masthaven, says his firm recently gave evidence at the Old Bailey regarding an alleged £1.5m bridging loan fraud, in which an introducer was involved.

He says: “Brokers need to be wary of introducers. If a case seems too good to be true and the client¹s story has holes in it, the broker needs to take a long, hard look at the case and judge if they are being involved in something untoward.”

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