MBE 2010: Brokers must wake up to fraud
Speaking at the conference in London, Malone said fraud was costing the UK around £30 billion a year and mortgage intermediaries had to wake up to the roles they were playing in helping fraudsters.
He told brokers: “Fraud is much more sinister and serious than overstating incomes. That’s just one tiny part of fraud. This isn’t just a few quid – this is our country at stake.”
Malone listed various types of soft and hard fraud, highlighting both sleeper fraud where foreign powers buy UK property as a base for criminal activity, and solicitor takeover fraud where impostors posed as lawyers and defrauded lenders and homeowners out of millions using title deeds to apply for mortgages.
He said too many brokers were turning a blind eye and not thinking hard enough about whether they knew their clients.
“Know your client,” he said. “I would say you don’t know your client. After purchasing a lead and a ten minute conversation, you don’t know your client. Don’t tell lenders you do.”
He said lenders and the regulator were tightening their attitudes to fraud.
“You’ll get no second chances now because lenders want to eradicate fraud,” he said. “We expect brokers to be honest about their clients, whether they’ve seen them and to do proper due diligence on clients too.”