The end of advance fee fraud is in sight

21 June 2010

The National Association of Commercial Finance Brokers has been working hard in the past 18 months to fight advance fee fraud.

This is a cause close to the association’s heart, as it was established in 1992 to drive the practice out of the industry.

Advance fee fraud is not a regulatory issue but a criminal one. It’s not a case of brokers playing fast and loose with the rules, it’s about ignoring them. If these brokers are willing to treat the law as optional the issue of regulation becomes secondary.

The recession provides an ideal climate for this kind of fraud to flourish. First, legitimate lenders are reluctant to lend money so some small to medium-sized enterprises become desperate to find finance. This makes them vulnerable to the promises of a lender or broker who says they can find the money they need.

Second, market conditions provide a cover story for why funds are not forthcoming. It’s become the norm to have a request for finance declined so even in cases where significant fees have been paid questions aren’t always asked.

So after nearly 18 months’ work by the association and the Fraud Intelligence Committee, the National Fraud Authority is investigating advance fee fraud in the commercial finance industry through its Action Fraud helpline.

It has asked us to provide information on the industry and any records we have on cases. With luck, this will remove advance fee fraud from the landscape.

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