The Financial Services Authority has announced tough new measures to try to curb soaring numbers of mortgage fraud cases, by tightening its surveillance of lenders and brokers.
The plans include sharing intelligence with other law enforcers and regulators including the National Fraud Strategic Authority, and increasing the intelligence received from lend-ers to improve enforcement. The regulator also intends to investigate hundreds of mortgage intermediaries, assessing their financial crime systems and reviewing the qualifications required to give mortgage advice.
"With the pressures facing UK consumers, it's not surprising that there is an expectation that levels of fraud will be on the increase", said Neil Lewis, head of Fraud & ID products at Equifax. He warned that the first quarter of 2008 showed an alarming 68 per cent annual increase in mortgage application fraud. "Fraudsters are becoming ever more inventive with ways to succeed with application fraud and, unless lenders start to deploy more sophisticated data-sharing solutions than have been traditionally used, fraud losses will increase."
But Cifas, the credit industry fraud avoidance organisation, has warned that there was little reliable data available on the true scale of the problem, and that the number of cases was likely to increase. Sue Anderson, a spokesperson for the Council of Mortgage Lenders, said: "The published figures are only the apparent cases of mortgage fraud, based on questionable data. As the housing market continues to fall, the visibility of these crimes will increase and the true extent of the problem will emerge."
Just 35 of the 140 mortgage lenders operating in the UK currently share fraud intelligence information with the FSA.
Philip Robinson, director of financial crime and intelligence at the FSA, said: "Mortgage fraud is a serious and widespread problem, and we expect the industry to do its part in tackling this menace."Reuse content