Regulatory news

FSA shocked by extent of fraud

16 February, 2008

Speaking at the Council of Mortgage Lenders’ (CML) Fraud Seminar, Philip Robinson, financial crime and intelligence division director for the FSA, said over 30 lenders had brought the 200 cases to its attention, with a third of the cases going on to enforcement action; many of which had yet to be made public.

The lenders had joined in the CML’s Information From Lenders Project to provide the FSA with information on brokers they were concerned with and Robinson called on more lenders to work with the financial services regulator and share intelligence.

Robinson revealed that there had been an increased ‘meeting of minds’ across the industry and police force over the need to tackle mortgage fraud and said it was evident that the real threat lay with organised rings, using mortgage fraud to make profit.

Robinson said: “Although the current market conditions are certainly making life more challenging for criminals, thinner fees and tighter margins can unfortunately present a renewed temptation for people to cross the line into criminal behaviour.

“Put differently, though, that is just one more reason for us all to come together and present a united front in tackling mortgage fraud.”

David Hollingworth, head of communications at London & Country, commented: “If the industry and regulator work together, it makes sense. 200 cases is a large amount and it needs to be weeded out. It’s quite a shocking figure and shows it’s not just odd, isolated cases.

"However, we’ve got to take it as an overall positive. It’s bad news for mortgage intermediaries again, but we’ve got to accept there are a few bad apples. It’s better than trying to brush it under the carpet. We’ve got to face the problems head on.”