Cfi: naCfb Advance fee fraud concerning


As the UK fell into recession there was a dearth of funding in the commercial finance market leading to the re-emergence of advanced fee fraud. Mortgage Introducer looks at the consequences of the actions of these unscrupulous brokers and the effects it has had on the industry as a whole


by Adam Tyler, chief executive, NACFB


In times of recession, desperate people resort to desperate measures and given the lack of funding in the market, it was unfortunate that some SMEs still fall victim to the less scrupulous broker. Advanced fee fraud reared its ugly head due to the desperation of SMEs requirement for funding. With funds scarce to find, there will always be a few fraudsters seeking to take advantage of the situation. Advanced fee fraud still threatens to


tarnish the reputation of the industry as a whole and unravel the extensive work and in particular the last few years, that the NACFB has pursued to end the practice, which is why it is so important to do as much as we can to tackle the problem of the opportunistic broker.


Code of praCtiCe One of the primary reasons that the Association was established in 1992 was to eradicate the number of cases of advanced fee fraud. The NACFB Code of Practice set a precedent in the concept of fair play in the commercial market and sought to ensure that members operated professionally thus enhancing the reputation of the industry. The Association also produced the Terms


of Business Agreement for its members which sets out clearly the relationship between the broker and the borrower which leaves little option for misunderstanding – it also clearly states the fees levied for the


broker’s services at the outset of any transaction. The Terms of Business Agreement has been updated over the years and still stands as a robust document that has stood the test of time and has stood up in court a number of times.


raising awareness In 2009 the NACFB also established the Fraud Intelligence Committee which enabled brokers and members of the public to report any brokers charging large up-front fees which resulted in little or no services being provided. The Fraud Intelligence Committee compiled over 100 cases with particular company names occurring with alarming regularity. Luckily, it did also indicate that whilst advanced fee fraud is still in existence, the number of fraudsters in operation is relatively limited. Reports to the Fraud Intelligence


Committee thankfully reduced considerably in the last few months of 2010. All the information compiled by the NACFB and the Fraud Intelligence Committee was handed over to the National Fraud Authority, a governmental organisation, to take the necessary action. Without a doubt, the NACFB Fraud Intelligence Committee helped to raise awareness of advanced fee fraud and it also hopefully helped to put an end to the opportunism of certain fraudsters.


reputable brokers Whilst SMEs are more aware of the scams that are perpetrated by the fraudsters, it is still imperative that anyone seeking funding remains on their guard. The old adage of ‘if it seems too good to be true, it probably is’ still stands and we advise anyone seeking funding to use a reputable broker.


50 mortgAge introducer FEBRUARY 2011 With the awareness of the issue of


advanced fee fraud, the NACFB has seen an impressive and large marked increase in SMEs approach the Association for reputable brokers. The NACFB website allows SMEs and members of the public to search for NACFB registered brokers in their area. It also offers them the reassurance that all of our members have undergone extensive background checks to join and that they adhere to a Code of Practice recognised throughout the industry. They also have the comfort of knowing that, in the rare scenario of something going wrong, they can contact the NACFB who will seek to address the problem.


working together Despite awareness of the issue of advanced fee fraud and the efforts that the NACFB has gone to in order to warn of its dangers, it seems that whilst opportunities exist for fraudsters to operate, the problem is unlikely to disappear. It is vital that we all work together and remain vigilant to protect the reputation of the commercial industry and the livelihood of the honest and professional broker. In conclusion, we now have increased


brand awareness by the SME of where to look for a broker and this will continue to be a theme for the NACFB in 2011. We are working with more and more trade bodies that have a code of practice for their industry and a need for commercial finance for their members. Hopefully, the coming year will see more relationships formed between NACFB members and the SME, who can see advice without fear of overpaying for advice.


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56