Lenders are keen to use HMRC’s anti-fraud tool


Lenders have welcomed the launch of an anti-fraud verification scheme last week by HM Revenue & Customs, the Council of Mortgage Lenders and the Building Societies Association.

Under the scheme, a lender that suspects mortgage fraud can send details of the application to HMRC which will check income details against information that is provided in Income Tax and employment returns.

Charles Haresnape, managing director of residential mortgages at Aldermore, says it will be a useful tool for clarifying inconsistencies in applications that lenders are unable to verify themselves.

But he adds: “I would see it as a last resort and anticipate only using it in rare circumstances.”

A spokesman for Kensington says: “Kensington welcomes the initiative, which will greatly assist lenders in tackling suspected mortgage fraud. While it is difficult to say at this stage how frequently the system will be used, we intend to use it as part of our approach to fighting fraud.”

HMRC has set up a specialised unit to deal with the requests for which lenders must pay £14 plus VAT per case.

The system will also be used by HMRC to assess whether the information supplied on tax returns is correct.

But a spokeswoman for HMRC says this will merely be a secondary use of the scheme.

She says: “The primary purpose of the initiative is to counteract mortgage fraud, but it will also allow us to compare the information consumers give to mortgage lenders and what they put on their tax returns.”

The CML says it does not anticipate the scheme having a significant impact on the time taken to reach a lending decision.

Paul Smee, director-general of the CML, says: “Following a pilot of the scheme, lenders say it has helped them avoid lending in some cases where there is a risk of fraud, as well as giving them confidence about borrowers’ credentials in cases they might otherwise have felt compelled to refuse.”