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EXCLUSIVE: Nine in 10 brokers reported for fraud not enforced

Sarah Davidson

November 22, 2011

Around 1,200 brokers have been reported to the FSA since the 2006 launch of the information from lenders scheme but only 110 brokers have been banned and fined a total of £2.5m.

John Hindle, acting smaller firms manager at the FSA, said: “Off the back of the information from lenders scheme reports we have seen around 100 brokers banned where they were knowingly involved in mortgage fraud. Approximately one in 10 leads to enforcement.”

Some lenders have criticised the delay involved in banning brokers, claiming it can take the FSA up to four years to take action against suspected fraudsters.

Tom Spender, head of retail enforcement at the FSA, acknowledged the truth in this.

He said: “In a perfect world of course we’d like to see cases proceed faster than a two to four year timeframe but we are dealing with significant fines of £100,000 and full bans from the industry so we can’t just proceed on accusations. We need to have firm evidence and we need to investigate properly.”

Spender added that liaison with the police and tax authorities could “take time” to build a case and legal review and challenge built into the FSA process also caused delays but were necessary to ensure fairness.

He said: “We see it as an effective sphere of work but we are always trying to deliver it as efficiently as we can.”


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