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FSA has opened 48 broker fraud cases in last six months

The Financial Services Authority has opened 48 fraud cases on mortgage brokers in the last six months.

In its Mortgage Lenders’ round-up for December the FSA says that so far in 2010 25 lenders have reported cases of suspected or proven fraud under its Information from Lenders scheme.

It says: “This has resulted in us opening cases on 48 mortgage brokers in the last six months. In the overwhelming majority of these cases there was a suspected or proven fraud within the last 12 months, which shows that mortgage fraud has not gone away.”

It also highlights the launch of an information gathering pilot by anti-fraud specialists National Hunter which will run for three months.

The FSA adds that it is committed to individual registration despite the delay until 2012/2013.

It says the delays are a result of an ongoing reprioritisation of work – particularly around the regulatory reform agenda.

It adds that once the rules are finalised, it will give firms sufficient time to put changes in place to comply with the approved persons’ regime, as with any new rules.

It also comments on the distribution and disclosure paper and says that 30% of all mortgage sales are information-only with no checks to ensure the consumer’s choice is appropriate.

It says: “We believe this is not delivering adequate consumer protection and our proposals are designed to address this.”

On disclosure it says it is focuses on key information rather than the method the information is conveyed.



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  • Phil 17th December 2010 at 12:07 pm

    Reply for the message on 16 dec at 3.44pm
    All that IFA’s and brokers want is a level playing field between themselves and banks.
    The banks want our business when it suits their needs but when it does not they bring in a duel pricing model. Or if they have excess funds they lower their arrangement fees for a limited period to get more business (ie BM )
    IFA’s and brokers also give quality advice to there clients while the banks have a sales and no advice culture.
    But before you reply saying IFA and Brokers are gods gifts again- I worked as a bank advisor for over 10 years and know these practices to be true.
    We are not saying bank advisors are any more guilty of fraud than IFA/brokers since you get a few bad ones in all industries. What we a saying is lets have a level playing field across the financial services industry on products and advice – as it used to be.
    This will then let the client choose where he whats to go for his products and services. Everyone wants to go where its cheapest look at supermarkets taking over from local shops as an example but by doing this we take away quality local service -Do we want this in our industry
    I feel today the finacial sevices sector focuses more on getting its paperwork correct and additional sales than spending time listening to the customers needs
    We need to look at this now before its to late- or maybe it already is?

  • Mike the Mortgage Man 17th December 2010 at 10:59 am

    What does the FSA mean by fraud? Is it organised malicious multi million pound fraud or small tradesmen who “defraud” HMRC by pocketing a few cash jobs.
    Given the FSA’s definition of self certication ie including fast track it is probably the tradesmen they are targeting.

  • Bobby 16th December 2010 at 6:40 pm

    One rule for the Banks and one rule for the mortgage brokers. You can only laugh. The FSA are a discreited self serving organisation just wanting to keep their lunch and lap dancin chums at Canary Wharf happy.

    The ” lets sweep it under the carpet ” decision on the investigation into RBS tells you all you need to know about this organisation.

  • Robin Banks 16th December 2010 at 5:06 pm

    We should put a FOI request into the FSA to request how many banks advisors they have investigated and how many have materialised into possible prosecutions

  • Philip Neville 16th December 2010 at 3:44 pm

    I see the typical blinkered views of IFA’s / Advisers who think they are Gods gift to Financial Services come to the surface again. Once again implying they are all innocent while Bank Advisers are guilty of Fraud. We regularly see cases of Mortgage Fraud reported in MS by IFA’s or Networked Advisers, and I have come across them in my Network too.
    Before they criticise others they must look closely at what they and their colleagues do themselves.

  • phi 16th December 2010 at 3:37 pm

    I was in the Natwest bank today paying some money into my account and could not believe that a cashier at the till told a customer in front of me that she should take out an offset mortgage – just because the client wanted to make a one off additional mortgage payment
    No advice – just sales and targets thats the banks motto these days

  • john 16th December 2010 at 3:14 pm

    I wonder how many in-house fraudulent cases the banks have covered up. We never hear of this do we, only the poor wee mortgage broker is made out to be dishonest. How many mortgage advisers work in banks in the UK – GUARANTEED TO BE MORE THAN INDEPENDANT MORTGAGE BROKERS – and yet not ONE SOLITARY CASE OF FRAUD.Strange especially when you consider the massive targets they have to meet to keep their underpaid salary. I wonder who is more likely to lie on an application. Glaringly obvious to me.

  • colin 16th December 2010 at 2:20 pm

    LOL, 30% of all sales are information only, non advised…..that will be the 30% done directly by the banks then yeah ??….so why are the FSA delaying individual registration and still allowing the banks to perform info only sales, dresssed as the client making an informed choice!!!!!!!!!.

    Reprioritising due to Regulatory reform…..which translated means “we now understand we were using a sledge hammer to crack a nut and need to re think our over zealous proposals to ensure that there can actually be a mortgage market as we came close to destoying it totally”