Today I’m going to focus on the West One Loans identity fraud. It’s had a huge amount of publicity in recent weeks so I wanted to put across my own thoughts on it.
Allegations have been made by an investor that it acted in breach of contract after an ID fraudster targeted the lender and its investors and the case is currently going through the courts.
But my major thought is that this one case has been blown seriously out of proportion.
Reading some of the comments on the case that have appeared across the media, you’d be forgiven for thinking that West One Loans is on the verge of collapse, or in some kind of financial or managerial disarray.
The lender is getting some really bad publicity and in my opinion it’s thoroughly unjustified.
We are the single biggest introducer to West One Loans and in November alone are on track to complete over £12m in loans.
This is not the behaviour of a lender that is struggling in any way or preoccupied with a certain case.
And a lender that is able to complete this level of loans, and which to date has originated over in excess of 530 loans and lent more than £170m, with over 180 private investors, is not going to come unstuck because of one piece of relatively small fraud.
Also, and perhaps most importantly of all, at the current point in time West One Loans has not even crystallised a loss on this case or any that has gone before it — and a loss, in any case, is highly unlikely.
This case, like all frauds, is complex, with all kinds of strands and intricacies, and it could take a period of time for the various insurers and third parties involved to establish where the liability lies.
But I have no doubt that a settlement will be achieved in due course.
So we’re talking about a financial hit that in my opinion is unlikely to even constitute a hit for the lender anyway – and its investors.
The fact that it’s business as usual for the lender’s investors says it all. They have not headed for the hills at all but continue to fund its loans on an ongoing basis.
Within lending, fraud unfortunately comes with the territory but more often than not it is not life-threatening in any way — after all, most lenders have insurance policies that claim to indemnify them in cases like this.
I have no doubt there will be a handful of other lenders in the short-term finance sector going through similar ordeals at the moment, but these have not even flickered on the media’s radar.
West One Loans remains a robust lender and we need to look at this case with that in mind. As one of the main lenders in the market, the lender has almost certainly been a victim of its own success and high profile.
If it wasn’t West One Loans, the media would in all likelihood have given this case a wide berth.
Even more fundamentally, I think it’s time the industry as a whole should pull together. We’re a small industry and if we constantly blow things out of proportion, as has happened in the case of West One, we’re doing ourselves no favours.