The subject of data security and identity theft has again reared its head in the pages of MI. Jonathan Barnett, director of All Mortgage Matters, was critical of Intelligent Finance (IF) over its handling of his personal documents, and the fact that the lender returned them via standard delivery rather than recorded delivery – which he requested when sending them in.
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When the documents, which included bank statements and other personal information, were returned by regular second class post, Barnett was furious not only at the lack of security in the sending of the documents, but also the fact that the envelope appeared not to have been fully sealed.
IF claimed that it was its policy to only return items such as passports and driving licenses by recorded delivery, and that other documentation would only be returned via standard delivery. But Barnett argued his major concerns were in regard to credit fraud, which is often reported in the national press and which we are all heavily informed of avoiding by simple measures, and at the lack of security for a customer. He said: “If this information fell into the wrong hands, my business could well be in danger.”
Quick to respond
IF was quick to respond to the dilemma. Jennifer Raeburn, senior communications officer, said that the company promotes certification of documents by qualified individuals to ensure that there is no possibility of customers being inconvenienced or the possibility of important documentation falling into the wrong hands.
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Although the matter has been dealt with and IF both apologised to Barnett and promised to review the matter, taking the debate right to the board and the managing director, it is interesting to examine what measures other lenders employ to ensure that personal information is sent and received securely, and whether any other brokers had experienced similar problems.
John Ford, director at broker firm Mustard Commercial Finance, was previously joint head of commercial at TBMC. With experience working on both sides of the mortgage industry, he is very familiar with the transportation of secure information, and the potential danger of not doing it safely.
Ford said: “I’ve been broking for 14 years and thankfully in that time I have had no major problems and no fraud or identity theft problems. In general, confidential information should always be sent under protected postage systems, and unfortunately occasionally one will slip through and someone ends up getting upset, as what happened in the instance here. In my time I have always sent important documents via recorded delivery as it is best to be safe.”
Lender steps
Although IF admitted responsibility over the documents being sent unsecurely, and was prepared to take the matter as far as the boardroom to review its policy on transportation of documents, it was interesting to see what steps other lenders took.
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Clare Mortimer, senior press officer at BM Solutions, said: “At BM Solutions, we return customer’s documentation via recorded delivery. Fraud is an ever prevalent issue for the industry and it is important that lenders take every possible step to minimise the opportunities for it to occur. All businesses working in the financial services industry have a role to play in combating fraud.”
Martin Bell, head of residential lending at Norwich and Peterborough Building Society, admitted that the lender received very few original documents and always asked for copy documents which must be signed and certified by the intermediary to state that they have seen the original and that the copies provided are of the original document seen.
Bell adds: “A number of lenders, including N&P, have electronic ID systems which negate the need for requiring passports or driving licences. However, in the rare instance that we receive original documents, we would contact the intermediary and ask how he would like them returned. In the case of other original documents such as pay slips or bank statements, we would usually return these with a copy of the intermediary’s offer or by first class post. It must be remembered that banks send out their monthly bank statements by second class post. Again, I must stress that we receive few original documents.
“In the rare instance that we have to send original documents through the normal postal run we will, if necessary, attempt to disguise the contents of an envelope, especially if the item is bulky, so it is not obvious to anyone what the contents are.”
While there is a need for lenders and brokers to ensure that they act correctly and efficiently when transporting documents, the shadow of credit fraud continues to float over the industry. With correct procedures taken on both sides the risk is diminished and safety increased, simply by taking a few steps.
