The regulator is working to encourage greater collaboration and coordination among key participants to toughen the industry's defences against this threat, and is it is important that mortgage brokers are vigilant in ensuring they have sufficient controls in place to prevent their own firm being used for committing fraud.
The FSA has published guidance for brokers. Brokers must also realise they are responsible for reporting any wider suspicions of fraudulent activity, or examples of poor practices resulting in potential fraud that have come to their notice. The FSA has had some useful leads from brokers in the past and values cooperation from brokers to help prevent the dishonest few from tarnishing the reputation of the industry.
If brokers have clear suspicions of fraudulent activity they should report it on the FSA’s website, or contact the FSA’s firm contact centre ([email protected]).
Philip Robinson, FSA director of financial crime, said: “Mortgage fraudsters tarnish the reputation of the industry as a whole, and there is no place in the market for firms who are – or have been – knowingly involved in mortgage fraud.
“Our work will increase our effectiveness in identifying and tackling such firms. If we find evidence of fraudulent activity at a firm we visit, it can expect to be subject to immediate and intensive action.”
To help the FSA with its work, it is crucial that firms are aware of their responsibilities; are able to recognise mortgage fraud; and have in place robust due diligence procedures for verifying information on clients and employees.
The following list gives firms an indication of what they should be looking out for:
• Suspected fraudulent documentation, i.e. bank statements, utility bills, wage slips, accountant references, P60s, passports, driving licenses etc;
• False – or doubts about – income and employment details; and
• Links or trends identified between clients, i.e. shared bank accounts, addresses, accountants, purchases on same development, identical loan amounts etc.
The FSA does not believe this will create any significant additional burden on firms who are already fulfilling their regulatory responsibilities. Rather, it is simply asking firms to ensure they are doing what they are already expected to do.
