19Jan2018

Fraud in the Specialist Lending Market

-  Is fraud a growing concern?

- What changes have businesses in the specialist lending market introduced in the last 12 months to combat fraud?

“Yes, Fraud is a growing concern for all Lenders, as Fraudsters develop more sophisticated means to commit crimes. We are continually developing new sources of data checks to verify Clients, as Specialist Lenders sometimes have no ‘face to face’ contact with customers when deals are originated via Brokers.

“In terms of measures used to prevent fraud, we carry out rigorous Underwriting and identity checks on all clients and their Solicitors. We also use a panel of selected Valuers and Professionals for any specialist advice and reporting.

“Undoubtedly the biggest risk for us at the moment is identity fraud, therefore proof of identity and Anti Money Laundering checks are vital. We have come across cases where an applicant attempts to raise capital on an unencumbered property, not legally owned by them. Therefore, in certain scenarios additional checks are required to identify the owners and when the property was purchased.

“On a more broader scale, the industry is increasingly working together and collectively they have put together a number of joint measures and Fraud Networks for information sharing. The Association of Short Term Lenders (ASTL) has a database which captures details of potential issues with valuers, borrowers and brokers.   

“We are members of a number of Financial Networks and Associations where Lenders share knowledge and best practices, so that we can continue to help combat fraud.”

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