the power hour
dealing with the intermediary market and we’ve dealt with thousands of firms of brokers, our experience was that the vast majority of them did see the clients. There were specific brokers who did not see clients but our first due diligence check was whether the broker saw the client because we always felt that a broker going in and seeing a client in their home and checking ID in their home was the best possible first stage of identity checking. But of course you have the anti-money
lenders that are continuing to trade. JMal: It just beggars belief that because of this period of growth lenders let all of their good systems from the 90s go out of the window. Now they’ve all been brought back in and the heads of risk run the show. A big element that came out at the FSA Financial Crime Conference is the information that lenders are forced to pass back to the FSA. Lenders are trying to understand what is fraud and fraudulent behaviour. We have got this dichotomy in which a broker can work with a client and put him through, but the broker doesn’t realise he’s doing fraud. That’s still fraud. If you read the Mortgage Fraud
Thematic Review from the FSA you’ll see everything the FSA has picked up like recruitment and training. None of that training is getting through to the staff of the lenders – that’s bound up with the need for good fraud prevention systems.
Beverley Young: That was one of the points in the Thematic Review that the training needed to be slightly more encompassing. So people from the client-facing side all the way up the chain. Lea Karasavvas: The same can be said with brokers because a broker can go to a client and say “this is what I need”. And then the client can place everything in front of you and it can look so good that a broker wouldn’t know that it’s an illegal document which leaves them exposed as well. JMal: At least he’s going to see the client. Part of the problem in our industry is that if you’re doing non face-to-face where you’re talking to somebody over the phone and you’ve bought the lead, nobody in the whole transaction, the broker, the solicitor or the lender, never sees the client. Eddie Goldsmith: In the course of
laundering regulations where if it’s non face-to-face you have to look at enhanced due diligence and there is an array of different checks you can use to satisfy that. JSR: There are so many potential points of failure in the underlying system, and to be fair to the banks and the lenders who have got these systems are trying to amend an awful lot to secure the process from end to end. But then it’s a cat and mouse game. The fraudulent guy will then say “well that’s looking tougher to do so we’ll do some other things or we do the same thing but apply it to lots of lenders across the market”. Then we get to the discussion on data
but I do think lenders now take it seriously, there is a lot going on but also it is a moving beast and it is a vast challenge as well. Angus Stewart: One of the challenges there is whether the lender has the budget or desire to invest sufficiently in keeping their systems up to date. Most of them have legacy systems and there are holes in that process which fraudsters will exploit when they realise there are opportunities for people to dip in. RK: From our perspective there are two distinct paths. One is for the professional fraud where people are trying to get their hands on the proceeds from loans and there’s no legitimate reason for the
Follow us on Twitter @mortgagechat 38 mortgage introducer AUGUST 2011
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