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Get together to beat the fraudsters

Fraud is present in our industry and we cannot ignore it. Whether it be identity fraud, address fraud or application fraud, it’s out there. And an alarming set of figures recently published by the fraud prevention service, CIFAS, shows a dramatic increase in the past year.

CIFAS demonstrates that there was a rise of more than 20% in application fraud between Q1 last year and the same period this year. This figure encompasses all financial applications ra-ther than just mortgage applications, but it’s a worrying fact nonetheless.

I recently watched a documentary on identity fraud and was amazed not only at how easy it is to obtain someone else’s identity but also how quickly this can be done – a matter of hours.

In this time, a fraudster can clone a person’s identity and access their accounts, running up huge debts that inevitably cause financial loss and embarrassment to the true owner of the name as well as the finance companies or banks involved.

The government, anti-money laundering groups and lenders have all done their bit to ensure that the system has been tightened up, but have they done enough?

Lenders have blacklists of brokers, accountants and solicitors from whom they will not accept business. It could be that lenders have had fraudulent documentation from them or are acting on information received. As a respectable businessman, I would not want my company tainted by fraudulent applications and I’m sure the vast majority of brokers feel the same way.

So do we need access to these blacklists that lenders must share with each other? Of course we do. It would be a small step but one in the right direction. And should we as an industry have a central database of people who are happy to produce spurious payslips or references? Yes.

I’m afraid I’m going to have to sit on the fence on the subject of whether technology will eliminate fraud or make it worse. I embrace technology and the benefits it brings to my business and my brokers.

But are paperless no-signature applications and even electronic money laundering checks playing into the hands of fraudsters? Their technology will get better and they will soon be able to infringe on these areas.

But staying paper-based and asking for certification of documents is also prone to inconsistency as there has to be confidence in the people certifying them.

There is no definitive answer when it comes to the best way to deal with fraud but by pooling our knowledge and experience we can at least make life difficult for the people who try to play us off against each other.


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