Police £700m fraud claim doesn’t stack up

The Council of Mortgage Lenders has slammed a recent Police report for failing to make the case that UK mortgage fraud is now worth £700m.

While the CML says it welcomes the Association of Chief Police Officers’ report called ‘Safe as houses? Organised mortgage fraud in the UK’, it says that ACPO’s estimate of £700m as the value of the fraud is inadequately supported by the report.

Because the results are based on responses to questionnaires by both police and lenders it is likely that there was double counting of fraud.

It also lashes out at the methods used to calculate fraud. Over 4,600 cases were considered under the assumption that each loan was given at 90% LTV and at the average house price of £184,000.

The CML calls the resulting £765m figure crude and says it is unlikely to bear any resemblance to the real scale of fraudulent transactions.

In its latest news letter News and Views (March 18), the CML says: “Lenders support greater vigilance by all agencies against mortgage fraud. but it is important that policy is based upon reliable information about the scale of the problem and ways in which fraud and other criminal activity manifests itself in reality.”