Fraudsters persuade us to hand over £350 million, as one particular type of fraud booms 71%

Fraudsters stole £753.9 million in the first half of this year, up 30% from the same period a year earlier.

There was a boom in push payment fraud – up 71% to £355.3 million. This is where we’re tricked into willingly transferring money to criminals. This kind of fraud has now overtaken card fraud for the first time.

Within ‘push payment’ fraud numbers, the number involving criminals pretending to be your bank or the police is up 129% from a year earlier.

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “We’re being bombarded by increasingly sophisticated scams. As banks have got super-smart about fraud, criminals know that customers are now the weakest link in the chain, so they’re focusing all their attention on tricking us into parting with our money. They prey on our fear of being ripped off, trust in the police and banks, and our natural instinct to believe someone who sounds convincing.

So-called ‘push-payment’ scams often start with fraudsters getting in touch out of the blue, either through email, a phone call or a text message. They use a variety of techniques to persuade us to transfer money to them. It sounds like the sort of thing we wouldn’t fall for, and when you put it like this, our research shows that only 6% of people don’t recognise that this could be a scam. However, these criminals use incredibly convincing and sophisticated approaches, so we all need to be aware of the risk.

The biggest rise in this kind of fraud is impersonation scams, when they often call claiming to be from your bank or from the police. Cases of this kind are up 129% from a year earlier. They might tell you that you have been a victim of attempted fraud. In order to protect yourself, they say you need to move your money into a new account, which turns out to be the fraudster’s account, and your money is gone.

The fraudsters will make their approaches seem even more realistic by ‘spoofing’ your bank’s number so it looks like a call is coming from the official number, and by setting up convincing-looking fake websites to steal your details so they can tailor the phone call to make you really believe it’s your bank.

The fact that fraudsters have stepped up their efforts means we all need to be aware of the risks of this kind of fraud. The very first step if you are called out of the blue by anyone at all – including your bank or the police – is to put the phone down and then call back on a number you already have for them to check it’s real. Before dialling, make sure the line has gone dead, because one trick the criminals use is to hang on the line, so you haven’t actually been disconnected.

If you are ever asked for any details on the phone, by email or text, or you click through from an email to a website asking for them, then this should be a huge red flag. And don’t be embarrassed to cut people off, or to refuse or completely ignore requests. You can’t be too rude to a scammer.”

United Trust Bank expands its ‘Fast-Track’ bridging criteria with larger loans and higher LTVs

United Trust Bank (UTB) has expanded the criteria for its award winning Fast Track bridging service following a very successful first six months.

UTB’s Bridging division fully launched the service to brokers in February this year and the dedicated Fast-Track service has proved extremely popular amongst brokers looking for quick decisions and pay outs on straightforward bridging proposals. Earlier this year the service won the award for the ‘Best Product Innovation’ at a prominent industry awards event.

UTB’s new improved Fast-Track qualifying criteria are:

  • Maximum loan size increased to £750k net (was £500k net)
  • Maximum LTV increased to 60% (was 55%)
  • Maximum LTV for AVMs increased to 60% (was 55%), which applies across all standard and Fast Track bridging proposals

UTB’s Fast-Track Bridging service is delivered by a dedicated team within UTB’s Bridging Division. The aim of the streamlined service is to take bridging loan applications meeting the qualifying criteria through a simplified ‘light touch’ underwriting and administration process to make it even quicker and easier for brokers to get loans approved and paid out.

Brokers can create their own Terms, DIPs and ESIS using UTB’s self-service broker Portal, or liaising with the in-house UTB Fast-Track team if they prefer. Fast-Track utilises some of UTB’s existing FinTech solutions and unique services such as Biometric ID verification, AVMs and dual legal representation, to progress the application to offer and drawdown quickly and easily.

Example Fast-Track Case 1

  • Customer required a £350k net Bridging loan for an auction purchase at £870k (including a subsale)
  • 43% LTV at an interest rate of 0.48% pm
  • Property passed AVM valuation
  • UTB App used for biometric ID verification
  • Offer issued within 24 hours of application and purchase completed ahead of auction house deadline

Example Fast-Track Case 2

  • Customers required a £500k net bridging loan to chain break an onward purchase in a competitive market
  • 35% LTV at an interest rate of 0.48% pm
  • Property passed AVM valuation
  • UTB App used for biometric ID verification
  • Joint legal representation selected by customers
  • Biometric ID shared with dual rep solicitors
  • Offer issued within 24 hours of application and loan drawn 7 working days later

Amadeus Wilson, Director at SPF Private Clients commented: “UTB’s Fast-Track service has enhanced our business by offering a very slick, simple and streamlined process which enables us to get offers within 24 hours and transactions into solicitors hands very quickly.

“Speed and certainty is vital in the bridging business with time pressures on clients increasingly compressed by demanding vendors in this competitive market. UTB’s online portal is quick and easy to use and the Fast-Track process helps us to retain and convert more business. UTB constantly look for ways to adapt and improve their proposition and the expanded Fast-Track criteria is great news for us and our clients.”

Owen Bentley, Head of Sales – Bridging, United Trust Bank commented: “We’ve been delighted by the amazing response and feedback we’ve had from brokers since launching Fast-Track to the wider market earlier this year and the expanded criteria will allow even more brokers and customers to benefit from the lightning quick turnaround the service provides. Fast-Track underlines UTB’s position in the market as a go-to lender for all brokers’ bridging requirements, regardless of complexity.

“We’re always talking to brokers and looking for ways to make bridging simpler and more accessible and Fast-Track appears to have really hit the spot. We know how competitive the market is and we’ll continue to support brokers with innovative solutions backed by skilled people dedicated to helping them place and complete more business.”

Castle Trust Bank added to Paradigm lender panel

Paradigm Mortgage Services, the mortgage services proposition, has today added Castle Trust Bank to its lender panel.

From today, Paradigm members will secure access to Castle Trust’s specialist range of holiday property and residential buy-to-let products. Castle Trust also works with advisers to find bridging and term lending solutions for their property investor clients.

As long as clients have a UK mortgage footprint, Castle Trust will consider applications up to 80% gross day one LTV from first-time landlords, limited companies, expatriates, and foreign nationals for:

  • Buy-to-let purchase/refinance – Castle Trust also top-slice UK income for stress coverage.
  • Holiday lets – Castle Trust use holiday let income, not AST.
  • Refurbishments.
  • Development exits.
  • HMOs.
  • Multiple units – including those held under a single freehold.

Castle Trust also offers ten-year term mortgages up to 75% LTV through its TermTen product with initial fixed rates for two or five years, and the ability to provide a guaranteed exit option on its bridging loans by linking them to its TermTen product, through the bridge-to-let option, should it be needed.

Initially launched in 2012 to provide creative, specialist lending solutions to property investors and investment products to savers, Castle Trust – with the backing of J.C Flowers & Co as its principle shareholder, became a fully-authorised bank in June 2020.

Richard Howes, Director of Mortgages at Paradigm Mortgage Services, commented: “Over the course of the past few months we have announced a number of new lender relationships with innovative operators in the market and we are very pleased to be able to bring on board Castle Trust – one of the key specialist lenders in the sector providing loans to property investors through a variety of product options. Our adviser members respond to creativity and flexibility in this space, and Castle Trust fit this bill, with a focus particularly in holiday property, residential buy-to-let lending and, coupled with the ability to link up with bridging options, means landlords and investors are well-catered for. We’re looking forward to working with the Castle Trust team and would urge our member firms to review its product range and the support it offers to advisers.”

Rob Oliver, Sales Director at Castle Trust, said: “Paradigm is an excellent mortgage club and we’re really looking forward to working with its members and increasing our distribution footprint through this new relationship allowing their DAs firms access to our innovative product range.”

4most Reflects on Most Significant Changes in Credit Risk over the Last 10 Years

The UK’s largest risk analytics consultancy, 4most, is celebrating 10 years in credit risk analytics this month. Working with many of the UK’s mainstream banks, building societies and lenders, the company, which was named in the Financial Times as one of Europe’s Fastest Growing Companies in 2019 and 2020 and has been listed multiple times as a Sunday Times Fast Track 100 company, having grown from four to almost 200 employees since it was first established in 2011.

Mark Somers, Chairman, who co-founded 4most in 2011, reflected on the most notable changes in credit risk over the last decade, “Ten years ago banks were more reliant on legacy IT systems for credit risk and were generally constrained by computing capability. This along with the arrival of cloud computing and the emergence of a vast number of challenger banks and fintech lenders, has significantly challenged the status quo. The evolving regulatory landscape with IFRS9 and the numerous changes to IRB in terms of default definition and the approach to PD cyclicality, has also kept us on our toes as a business and has provided an opportunity for us to support a wider array of clients.”

The city-based firm is also predicting a consolidation of lenders in the UK over the next 10 years based on the notion that the number of retail and SME banks for the scale of the UK economy feels somewhat inefficient.

Managing Director at 4most, Rob McDowell explained, “We are already seeing some new models of lending coming to the fore, including ‘buy now pay later’ and open banking-based offerings, which present a real challenge to credit card providers who have been relying on revolving credit balances at expensive interest rates. Perhaps more interestingly, we are anticipating the established tech giants in the UK to launch banking platforms in the not-too-distant future, possibly linked to the roll out of digital currencies. It is a market these players have left alone for some time, but it is likely only to be a matter of time before that changes.”

4most has also predicted that credit risk will be revolutionised in the next 10 years by climate change, suggesting that the accelerating climate emergency will lead to a re-assessment in the assumptions around what is considered to be a safe investment for businesses.

Somers highlighted that “Physical risks will need to be monitored more carefully over coming years and credit policy will be increasingly used by central banks to drive households and industry to transition to a greener economy. As a result, credit risk decisions based on climate factors could indeed become one of the key drivers for change that accelerates the green revolution.”

The move towards a greener economy has also had an impact on future plans and areas of expansion for 4most as it looks to support more lenders and investors on climate change risk in the future. Historically, the firm has operated in credit risk, analytics and regulation in the financial services sector, but has also revealed it will look to grow its services into a range of new sectors including general insurance, open banking and decisioning platform implementation and support.

4most has also experienced further growth over the last 10 years across Europe and also the Middle East via its joint venture with partner 4pi. Part of the 4most Group, 4pi also comprises a team of credit risk analytics experts supporting banks and financial institutions.

McDowell added, “Being an employee-owned business we are very proud of our journey to date; our people have always been our biggest asset and all of our consultants are permanent employees. It is certainly an exciting time for the business right now as we look to consolidate our services and expand into new sectors across the UK, Europe and the Middle East.”

Hodge sees RIO mortgage applications increase by more than a third

Hodge has seen a 36% increase in the number of RIO mortgage applications in 2021, compared with last year.

The total value of RIO mortgages with Hodge has also increased by 31%, although the average loan value has remained relatively static.

Emma Graham, Business Development Director at Hodge, said: “Despite a difficult year and start to 2021 our latest data shows that interest in alternatives to the traditional later life products such as Equity Release, is still growing.

“As we’ve seen previously, the interest in RIO mortgages continues to grow steadily but surely. And it’s not just the number of applications that’s gone up, but also the overall value of those applications.

“We believe this is partly due to more and more customers looking at alternative later-life lending options. And at Hodge, we have been able to develop products that fit an ever-changing later life customer and their lifestyles.

“Since launching this product in 2018, RIO has slowly and steadily increased in popularity, with intermediaries introducing their customers to the product as a useful tool to release finances, for things such as home improvements, family gifts, or just to enjoy retirement post covid.”

Property sales accelerate again: July was a temporary pause and not a full stop

Property sales rose to 106,150 in August – up 28% from July (not seasonally adjusted). This is 24.8% higher than a year earlier.

Sales had dropped over two thirds the previous month.

Sales over the 2021/22 tax year so far are higher than any other year for the past decade.

Sarah Coles, personal finance analyst, Hargreaves Lansdown: “The property market was just pausing for breath in July, and set off again in August – albeit at a slightly less frenetic pace. The withdrawal of most of the stamp duty break at the end of June meant buyers made a dash for the finish line, leaving a gap in July. However, August’s figures show that this was a temporary pause rather than a full stop.

“Sales are roughly where they were at this time of year before the pandemic. So for example, there were 111,600 transactions in August 2019.

“It goes to show that the ongoing game of musical houses isn’t over, as some of those living within commuting distance of city centres make a break for the country, those in the centres take a step to the outskirts, and new buyers move into their vacated flats. This has all been supported by mortgage rates, which are still at historic lows, so buyers are able to lock in a rate that makes a move affordable.

“August’s figures will be a relief for homeowners, especially those who bought at the height of the frenzy in June, who were worried that July’s dramatic fall in property sales was just the initial drop of a vertiginous plunge. It’s also a reasonable sign that falling house prices in July aren’t likely to be the beginning of a more dramatic drop in the immediate future.

“The figures are also good news for those who have struggled to sell, particularly in and around cities, who will be relieved that they haven’t missed the boat and that buyers are still on the hunt for a new home.”

 

UK Businesses Fear Increased Risk of Data Breach as a Result of Hybrid Working

More than eight in 10 (83%) UK businesses say hybrid working increases the risk of a data breach, yet over a fifth (22%) remain unprepared if it happens, ­­with speed of response the top concern.

According to new research published within TransUnion’s Data Breach Support for Businesses ebook, business leaders expect 43% of their workforce to be hybrid working in the coming year, splitting their time between the office and remote working. Yet this change to working practices means a far greater potential for devices and data to end up in the wrong hands.

Hybrid working is currently seen as the top data breach threat, identified by almost a quarter (23%) of business leaders. This is because workers are now regularly switching between secure office environments and vulnerable home networks, and handling sensitive information on either public or unsecured private networks. As a result, the risk has increased for both accidental and malicious data breaches.

Kelli Fielding, managing director of consumer interactive at TransUnion in the UK, said. “In the last year, we’ve seen leading companies around the world experience very public data breaches. Each instance has the potential to put customers at huge risk and damage their trust with the organisation responsible. Businesses that suffered a data breach highlight costs such as the expense of investigating the incident (37%) and compensating customers (28%) as the most common problems following a breach.

“But the long-term loss of consumer trust can be just as challenging as the immediate cost – three in 10 businesses say a data breach damaged their reputation, while 19% lost customers as a direct consequence. By offering the right tools in the wake of an incident, businesses can give their customers the ability to detect signs of identity theft, minimising the chance of financial loss and protecting those whose data has been compromised.”

Concerns about data security are well founded. Almost all UK businesses (94%) saw an attempted phishing incident in the past 12 months, with nearly three quarters (74%) receiving more phishing attempts than they did in the previous year.

Since the General Data Protection Regulation (GDPR) was introduced in May 2018, more than 32,000 data breaches have been reported to the UK’s Information Commissioner’s Office (ICO), with fines worth £90m issued to UK businesses. This year alone, more than one in four (26%) UK businesses report that they have experienced a data breach.

Mark Read, senior account director of data breach support services at TransUnion in the UK, said: “The good news is that CEOs and business leaders across the UK are more engaged than ever on the topic of cyber security but many organisations are still underprepared. Having a robust incident response plan in place, including third party support, will enable prompt action and really help to limit how much damage a data breach does to your organisation.

“Our TrueIdentity solution helps businesses retain trust by giving consumers access to credit information alerts and dark web monitoring, to help them spot potentially fraudulent activity and safeguard their identity in the event of a data breach.”

CHL Mortgages reduces rates across entire buy-to-let product range

CHL Mortgages, the intermediary-only specialist buy-to-let lender, has reduced rates across its entire product range catering for individuals, limited companies and HMOs/MUFBs.

Rates now start from 2.88% on the lenders’ two-year fixed rate buy-to-let product range (up to 65% LTV) and from 3.05% (up to 75% LTV). Both are available on its individual and limited company offerings and a 1.5% arrangement fee applies.

Five-year fixed rates also start at 2.88% (up to 65% LTV) and 2.98% (up to 75% LTV). Again, both are available for individual and limited company, a 2% arrangement fee applies and calculated ICR at payrate.

The lenders’ HMO/MUFB range sees the largest rate reductions at the 75% LTV band, with two-year fixed rates now starting from 3.08% and five-year fixed rates now beginning at 3.38%. Both are up to 75% LTV with a 2% arrangement fee.

Full details of the changes are as follows:

Individuals & Limited Companies

Up to 65% LTV:

  • 88% two-year fixed with a 1.5% arrangement fee (rate reduced by 0.16%)
  • 88% five-year fixed with a 2% arrangement fee (rate reduced by 0.11%)
  • 08% five-year fixed with a 1% arrangement fee (rate reduced by 0.11%)

Up to 75% LTV:

  • 05% two-year fixed with a 1.5% arrangement fee (rate reduced by 0.10%)
  • 98% five-year fixed with a 2% arrangement fee (rate reduced by 0.12%)
  • 18% five-year fixed with a 1% arrangement fee (rate reduced by 0.12%)

HMO/MUFB

Up to 65% LTV:

  • 99% two-year fixed with a 2% arrangement fee (rate reduced by 0.21%)
  • 29% five-year fixed with a 2% arrangement fee (rate reduced by 0.10%)
  • 49% five-year fixed with a 1% arrangement fee (rate reduced by 0.10%)

Up to 75% LTV:

  • 08% two-year fixed with a 2% arrangement fee (rate reduced by 0.31%)
  • 38% five-year fixed with a 2% arrangement fee (rate reduced by 0.10%)
  • 58% five-year fixed with a 1% arrangement fee (rate reduced by 0.10%)

All five-year products are calculated at ICR payrate, including HMO/MUFB and early repayment charges are 3/2% on two-year fixed rates and 5/4/3/2/1% on five-year fixed rates. Rental income for these products starts from 125% of the monthly mortgage payment and they are applicable for purchase or re-mortgage purposes. Each BTL product has a minimum loan size of £25,001 and a maximum loan size of £1m.

The product range caters for first-time landlords, portfolio landlords and limited companies covering a variety of BTL investments including HMOs, MUFBs.

Ross Turrell, Commercial Director, CHL Mortgages commented: “Since launching four months ago, we have applied a competitive but cautious approach to our product pricing as our commitment to delivering a consistent service offering is paramount and underpins our lending proposition.

“Our wide distribution footprint with clubs, networks and Directly Authorised broker firms, means that we are confident that by making such competitive changes across our range will prove extremely popular and introduce us to many more new brokers seeking to use CHL Mortgages for the first time.”

Economic downgrade and analysis of key industries in Indonesia

Agriculture, chemicals and ICT are the amongst the most resilient industries in Indonesia despite a downgrade to economic recovery, reports trade credit insurer Atradius.

In the new Indonesia Country Report, Atradius highlights how Indonesia’s GDP shrank 2.1% in 2020 as a result of the Covid-19 pandemic. This was a smaller contraction compared to many other countries as Indonesia’s economy is fairly closed, making it less susceptible to global trade downturns. However, Atradius economists report that while GDP rebound was underway earlier this year, Indonesia’s economic outlook is now muted as it grapples with a new surge of coronavirus cases.

The Atradius report details Indonesia’s GDP grew 7% year-on-year in Q2 due to surged exports, robust government spending and a rebound in investment and household consumption. But the resurgence of Covid-19 and subsequent lockdowns has led to a downward revision to 2021 GDP growth forecasts; to 3.3% from 4.7% in March. Looking forward, Atradius forecasts Indonesia’s GDP will accelerate to almost 7% in 2022, contingent on containment of the pandemic and effective vaccine rollout. This growth is expected to be fuelled by a rebound in private consumption, investments and government consumption; increasing more than 6%, 9% and 5% respectively.

With a ‘fair’ performance outlook, Atradius’ analysis of key industries in Indonesia reveals agriculture is one of the most resilient sectors amidst the pandemic, with rising output in 2021. Also proving to be robust are the chemicals and ICT industries. According to Atradius, demand for ICT products has rebounded since H2 of 2020 with an increase in projects supplying hardware and other IT infrastructure, leading to ICT wholesalers and project suppliers being able to retain the level of revenues and margins recorded in 2019. Meanwhile, the construction sector will be boosted in H2 by new infrastructure projects supported by higher public spending.

With a ‘poor’ performance outlook, Atradius reports recovery in the energy and mining industries has remained below expectations so far, despite increased commodity prices and the initiation of new smelting projects. Similarly, the transport sector is weighed down by serious issues facing commercial passenger transportation with mobility affected by the pandemic. In addition, lockdown measures and travel restrictions have led to many Indonesian service segments suffering heavily. Thousands of hotels and restaurants have been forced to close while related businesses and tour operators have suffered major losses, and a rebound is currently not yet on the cards.

Damien Dawson, Southern Regional Manager, of Atradius UK, commented: “While all global markets have the impact of Covid-19 as a common risk, the extent of that impact is unique to each. And, as we have seen in Indonesia, is subject to change. The spread of Covid-19, the speed of vaccination campaigns and the nuances of each market all play a significant role in the future outlook meaning that the risks of global trade are as uncertain as they are acute. As a trade credit insurer, Atradius provides real-time intelligence on overseas markets as well as individual buyers to help businesses maintain a reliable and accurate assessment of the risks and only when armed with the right information can businesses create robust trade strategies where they can seize opportunities while being prepared for whatever may come next.”

Consumer eligibility for credit increases as restrictions ease

The latest insights from Experian suggest that consumers have a better chance of finding a pre-approved credit card or loan than they did at the start of this year.

Following the lifting of lockdown restrictions in July, lenders have continued to bring new products to market. 61%1 of customers using Experian’s Marketplace saw a credit card that they were pre-approved for in August 2021, a 30% increase on January’s figures. Further, 44% of customers saw a loan that they were pre-approved for in August 2021, a 33% increase over the same period.

Being pre-approved for a product means that you are guaranteed to be accepted for it if you apply, subject to identity and fraud checks.

Customers with a poor credit score (561 – 720) were 49% more likely to see a credit card that they were pre-approved for in August 2021, compared to January 20211, and 32% more likely to see a loan that they were pre-approved for. Those with a very poor credit score (0 – 560) were 94% more likely to see a pre-approved credit card offer and 18% more likely to see a pre-approved loan offer over the same period.

Sebastian Worbs, MD Products at Experian Consumer Services said: “Eligibility ratings give people an indication of their chances of being approved for a specific credit deal. As lenders continue to bring competitive products to market consumers have a better chance of being pre-approved for a product that meets their needs.

“People looking for credit should regularly check their credit score and use comparison services to shop around until they find the one that’s going to work best for them. This will give them the knowledge to apply with confidence when the moment is right and help protect their credit score.”

Alongside the improvement in credit eligibility, Experian found an 18% increase in the number of people searching for credit in the two weeks following Covid-19 restrictions ending in England.

Sebastian Worbs continued: “With the economy still in uncertain shape it can be reassuring for people to know that there are credit options available to them if they need it. Many brands are improving their offers at the moment, whether that’s a lower APR, or an increase in 0% balance transfers. A better deal on existing credit can free up essential funds for other things, which could be a real help if your finances are temporarily stretched. Of course, if you you’re experiencing serious, prolonged financial difficulties, we’d urge you seek guidance as soon as possible.”