Company and adviser banned for failings which resulted in fraud

11 January 2010 | By Natalie Thomas

A mortgage firm has been fined £35,000 by the Financial Services Authority for failings which led to at least 16 fraudulent mortgage applications being submitted.

James Ian Shanks, a former partner and mortgage adviser at Case Funding Centre has also been banned for recklessly submitting false information to lenders.

In one instance in 2007 an adviser who worked for a sister company applied for a mortgage through the firm. On the application form it was stated that she earned an annual income of £45,000 when in reality she earned £28,713.

The regulator found that the level of income declared by the applicant to Revenue & Customs was substantially less than the amount declared on the application form.

During its investigation the FSA found that CFC did not have adequate systems and controls in place to counter the risk of clients and staff submitting applications based on false income and employment data.

Furthermore, the regulator ruled that advisers performed little more than superficial checks on applicants’ income and employment details.

These failings, combined with what was held to be CFC’s historically weak recruitment process, led the FSA to conclude that the firm had exposed itself to the risk of being used to facilitate financial crime.

Margaret Cole, director of the FSA’s enforcement and financial crime div-ision, says it expects all authorised firms including lenders to take steps to stop their businesses from being used to commit crime.

Cole says: “Both CFC and Shanks fell short of the standards we expect and they are being punished for their failings.

“We will continue to take action against any firms or individuals who present a risk to our objectives of reducing financial crime and maintaining market confidence.”

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