It is an unfortunate statement to have to make, but we are living in a world where fraud and cyber-related threats are all too real. This is an issue not only being recognised in the boardrooms of multinational companies but one which is also filtering down to individuals and SMEs who previously thought they were too small to be considered a potential target.
I am certainly not trying to be a scaremonger. However, the mortgage market – including the intermediary community – must be realistic about such threats and ensure that we are openly discussing them to ensure that this topic remains high on everyone’s agenda.
Thankfully, the latest figures from Cifas suggest that we are on the right track. Its annual publication of data – Fraudscape – showed that there were 2,495 cases of mortgage fraud in 2018, down from 3,039 in 2017, representing a yearly fall of 18 per cent. Application fraud accounted for most of the cases of mortgage fraud, with 2,386 cases, down from 2,915. In 2018, the use of false or stolen documents was said to replace frauds around declared levels of income as the most common reason for reporting application frauds.
As a lender it is imperative to have a robust fraud prevention strategy in place plus a substantial, and active, fraud team alongside a raft of readily available resources for individuals and business borrowers. For intermediaries, there is now a wealth of support on offer for themselves and their clients as lenders, networks and clubs have all become increasingly active in this area. For example, PMS mortgage club recently launched a hub designed to help directly authorised brokers combat potentially fraudulent mortgage activity.
Tackling financial crime has been flagged up as a priority area by the FCA and, with constantly evolving techniques being employed by fraudsters, it is great to see the regulator shining the spotlight on this area. Education is vital in combating this threat, and firms should seek specialist support where necessary to safeguard their business needs and processes where possible.
On a positive note, cases of mortgage fraud are still extremely rare, and the vast majority of property deals do go through without a hitch. But that’s not to say we should rest on our laurels. All links in the mortgage and property chain need to be vigilant, take suitable defensive measures where possible and open-up the right channels to take appropriate action. And help is readily available, provided firms continue to identity the threats they are potentially facing and not ignore them.