Fraud targeted against lenders encompasses a wide range of crimes – from submitting inflated claims of income in support of an individual mortgage application to much more systematic and often highly organised criminal behaviour.
But lenders remain dedicated to detecting and deterring fraud however it occurs.
In support of the continuing commitment of the wider lending industry and of individual firms to tackling fraud, the CML has added its support to a new initiative to help promote better co-ordinated and inter-linked activity by a range of partners to target financial crime.
On behalf of lenders, the CML is supporting the new Fighting Fraud Together strategy, launched last week by the National Fraud Authority. The CML is one of 37 separate organisations that have joined together in support of this initiative.
It is the first time that a range of government organisations, industry representative bodies like the CML, law enforcement agencies, regulators and voluntary groups have joined together on such a large scale to tackle fraud.
Working together
Like other supporters of the initiative, the CML advocates expanding and extending the range of successful activities that already exists in the lending industry to target fraud.
The CML also remains committed to sharing intelligence about fraud across different organisations to prevent and disrupt the activities of criminals.
Police, led by the City of London force, will continue to lead the front line in the fight against financial crime.
In addition, the new initiative sets out to deliver greater intelligence capabilities to the National Fraud Intelligence Bureau, with the ain of disrupting the activities of fraudsters and rapidly closing down the channels through which they operate and launder money.
Other priorities for the initiative include:
- information-sharing between industry and the public sector to help prevent fraud attacks; and
- a new research tool that will help all sectors to provide more targeted prevention advice to the public, particularly vulnerable people, and to develop a better understanding of the vulnerability to fraud of small businesses and the support they need.
The new initiative has also been endorsed by the government.
Crime and security minister, James Brokenshire, said:
"I applaud the different organisations and industry groups that have joined together to play their own part in Fighting Fraud Together. By sharing what we know, we will reduce fraud. This new strategy is important to better target, prosecute and prevent it."
The CML recognises that supporting the new strategy, which seeks to integrate and co-ordinate the activities of a large number of different types of organisation, will deliver wider benefits in the common cause of tackling financial crime.
Other anti-fraud measures
Support for the new initiative sits comfortably alongside a series of other activities to tackle financial crime that the CML and individual lenders already pursue – or contribute to in other organisations.
These include:
- The Financial Services Authority’s 'information from lenders' scheme, launched in 2006, following discussions with the CML. This scheme provides a channel through which individual cases of proven or suspected fraud can be reported by lenders to the regulator.
- One of the advantages of this initiative is that lenders can report snippets of information or even just suspicions to the FSA. An individual lender may not have enough evidence to take further action, but the FSA may be able to pool data from a range of different sources to bring about a successful prosecution or take other disciplinary action.
- Last year, the FSA said that, over the preceding four years, the information from lenders scheme hade generated 700 alerts and 100 enforcement cases, resulting in the banning of 80 mortgage intermediaries involved in criminal behaviour and the imposition of fines totalling more than £1 million.
- The activities of the National Fraud Authority (NFA). Set up as an arms length government body in 2007 to provide a focus for co-ordinated anti-fraud activity, the NFA meets several times a year with the CML and other major players working together to target financial crime.
- In particular, the CML has supported work specifically to tackle mortgage fraud, on which the NFA published a detailed report that was updated again last year. The NFA has developed a joint plan of action, supported by organisations in the public and private sector, including the CML. This has led to the establishment of a mortgage fraud forum to work across the industry.
- The NFA acknowledges that lenders have made a number of operational changes to the way they run their businesses that have helped address some of the problems of mortgage fraud.
In last year’s updated report, the NFA’s then chief executive, Bernard Herdan, said:
"With the industry pulling together, substantial inroads have been made to tighten systems and controls, regulate professionals and share knowledge."
- The mortgage verifica
