Christopher Farrell – a former Apprentice candidate – was, it turns out, a dodgy mortgage broker.
The smooth-talking Scouser was given a nine-month suspended prison sentence on Friday for inflating the salaries of mortgage applicants and even forging documentation. The most ham-fisted attempt at fraud by Mr Farrell was changing a payslip from Plymouth Council to one purporting to be from Lewisham, but failing to remove the Plymouth area telephone numbers. A botched Tipp-Ex job worthy of any Apprentice episode.
He performed the fraud without the knowledge of the applicants or his employer in order to reach his monthly sales target. Mr Farrell's crime was two-a-penny in the boom of the middle of the last decade. Hundreds of brokers were committing fraud and, incredibly, their victims – the lenders – seemed to have at least turned a blind eye to it. After all, like Mr Farrell, everyone had targets to meet. Subsequently, some of these brokers – once the financial crisis was under way – were caught by the Financial Services Authority and banned. Few, interestingly, have faced the same criminal sanctions as Mr Farrell. In fact, where Mr Farrell can consider himself a mite unfortunate is that he chose to commit a relatively minor spate of fraud in 2009, once the world had changed, where applications were – occasionally – being checked, and lenders started giving a bit of a damn.
Now the adventurous Mr Farrell says he has learnt his lesson and is off on Monday on a job protecting shipping from Somali pirates – he is a former Royal Marine, with a distinguished service record. He may find the pirates a little bit more honest and straightforward than the mortgage industry.
Good riddance to bad rubbish
The only disappointing thing about the news that 35 debt-management firms had surrendered their consumer credit licences and that a further 15 may lose theirs following an Office of Fair Trading investigation was that it still leaves nearly 100 firms operating in this discredited sector. Last year, the OFT served notice on 129 firms that they faced action if they didn't up their game. The message was simple – shape up or ship out – and it seems that 35 have chosen the latter option.
Having met many victims – I'm not going to say clients – of the debt management industry, it's safe to say that no one has a good word to say for their service. They draw people in and sign them up to expensive, penalty-laden contracts aimed at paying just a proportion of their debts but lining the pockets of the debt-management firm.
The OFT's action surely is only the start of what should happen to this shark-infested industry. Personally, I would like to see a total ban on their advertising and ban the use of phrases or marketing which imply that their services are free or that they could just possibly be a bona fide debt charity. Any firm found cold calling – and I have received half a dozen of these over the past few months – should instantly lose its licence. In fact, I'd have liked to have seen the OFT go further – withdrawing all credit licences from debt-management firms, so that if they want them back they have to re-apply and go through a thorough investigation of how they treat customers. These firms should be presumed guilty until they can prove their innocence.
Keep an eye on inflation
I don't know about you but I barely visited a shop or restaurant in December – apart from the obligatory but foreshortened Christmas shop – due to the atrocious, unprecedented weather. And it seems I was not alone, with the economy going into reverse last quarter. The economy relies on consumer spending to a massive extent and without this, life drains away.
However, the reporters I saw on the BBC could barely contain their glee that the narrative they have built up lately, that government spending cuts will send the country back into recession, was seemingly being proved correct. The fact that government cuts are very small this financial year and are barely even being felt didn't stand in the way of this interpretation of one quarter's growth figures. But government cuts as a reason for these poor growth figures are a complete red herring.
What's more, the Office for National Statistics has been shown to have badly misjudged its figures in previous quarters – issuing a low growth figure only to revise it up considerably a few weeks later. Questions should be asked about ONS performance, and perhaps it ought to delay future announcements until it can be much more sure.
In economics, momentum is important; if people believe there is another recession on the way then the chances of there being one increase considerably. Nevertheless, as I wrote last week, regardless of the dangers of a double-dip recession – and I'd still just about bet on us avoiding it – this is no time to ignore inflation. During an economic recovery there are quarters when the economy takes a backwards step – sometimes due to one-off factors such as the abysmal weather. But if policymakers don't focus on the dangers of rising prices and inflation becomes embedded in the economy then, as a country, we will be paying the painful price for the rest of the decade and possibly beyond.Reuse content