Mortgage Fraud: Latest figure tops £700million

The Association of Chief Police Officers (ACPO) has released a restricted report into mortgage fraud which puts the figure of confirmed mortgage fraud at £700million.

Although the report has not been made public, the report will be distributed to the financial industry as well as to police forces across the UK.

Mike Bowron, ACPO lead on economic crime and Commissioner of the city of London police, said:

“Organised mortgage fraud can take many forms and while difficult to measure accurately, remains a significant element of the UK’s annual fraud losses. In sharing this report with the financial industry and police forces nationally we are raising awareness of the problem and how to tackle it.

Tackling Mortgage Fraud

ACPO has given a range of examples of how mortgage fraud can be prevented. The organisation also supports the National Fraud Strategic Authority (NFSA), whose Director, Sandra Quinn spoke at the last 192.com Business Services Prove-ID Fraud Forum.

Mortagage fraud creates high profit opportunities for fraudsters, with a relatively low risk of detection. The ACPO report states that in one fraudster was able to make a profit of more than £10,000,000. With such high value crime, mortgage fraud also has obvious appeal to gangs of organised criminals, including terrorist groups. 

How is mortgage fraud committed and how can it be prevented?

Over valuation is a relatively easy way to ensure a quick but fraudulent profit. Conveyance  professionals can also support fraudulent activity.

There is also the more traditional problem of bogus applicants using fake ID documents, such as pay slips, passports, and national insurance numbers.

One of ACPO’s recommendations is that “an automated, preferably online, system of checking all mortgage applications against official records including passports, driving licences, National Insurance numbers, declared income and benefits data” is created.

Using 192.com Business Services, mortgage lenders and other finance professionals are able to carry out online identity checks as well as checking paper documents such as passports, driver’s licences and NI numbers using Document-ID.

With lending fraud costing an estimated £370 billion in 2007, mortgage fraud represents a small proportion of a wider problem, yet a significant loss to those in the finance industry as well as to the wider population of home owners.