In a process full of critical tasks, there is perhaps none more important – at least initially – than being 100% certain the person you are advising is exactly who they say they are.
There is added complexity given that many advisers – in the age of remote, tech-enabled advice – often don’t physically meet the individual concerned and rely completely on the documentation they receive. We have moved a long way from deciding on the credibility of that individual by seeing the ‘cut of their jib’ and rightly so, although at least with a physical meeting it’s possible to check photo ID against the individual in front of you.
This is a serious issue not just for advisers but the entire mortgage industry. The sector is attractive for potential fraudsters given the large sums of money involved and we’ll all be acutely aware of those fraudulent acts which have resulted in individual losing their entire deposit monies while other cases have seen criminals effectively selling someone else’s property from right under their noses.
Despite some excellent cross-industry work in the mortgage market to combat such fraud, recent data published by Cifas, the fraud prevention service, outlined how mortgage fraud had increased by 5% in the first half of the year, compared to the last six months of 2018.
When we break down those attempts: fraud, using a false document had increased by 14%, while altering documents to be submitted for a mortgage increased by nearly a third, at 32%. Conversely – and as a consequence of the various and progressive detection techniques – identity fraud overall has dropped by 26% while ‘facility takeover’ – where a fraudster effectively takes control of an individual’s bank account – decreased by 25%.
It all goes to show how much of a target advisers can be for fraudsters seeking to perpetrate fraud, especially as you are often the first line of defence. If you fail to spot the warning signs or you are somehow hoodwinked by a fraudster, then the chances of a fraud being perpetrated are greatly increased.
In that sense, it is vitally important that you have in place all the necessary tools at your disposal in order to combat fraud, particularly ID and residency– and there might be plenty of varieties of ID being provided in order to try and convince you that the individual is who they say they are.
Given the criticality, we’ve recently integrated a new ID verification system into our Revolution system which allows firms to immediately and seamlessly validate (or otherwise) the identification of a client. In partnership with global-leader Experian, it returns a ‘pass/referral/rejection’ response immediately with some valuable additional insight into the customer.
Again, this is all in place to present a full picture of the client and to make those vital checks; the adviser gets a full ID and address verification report, PEP confirmation and other background data designed to highlight any concerns which the adviser can then act upon right up front.
Time is often of the essence when it comes to customer validation and the ability to check almost instantaneously will save hundreds of administration hours each month; that’s without considering how such checks mitigate attempts at mortgage fraud..
The point to be alive to at all times is that advisers are in the mortgage fraud firing line. Fraudsters are not going to refrain from trying, and while the vast majority are unsuccessful mainly because they are unsophisticated in nature, all it takes is for a slip in standards and compliance, and everyone connected with the case is going to find themselves in hot water.
Be vigilant, maximise use of available technology and be certain who you’re dealing with – your reputation and your business are at risk, unless this is a priority.