Commentary on Bank of England Money and Credit announcement

“With the UK economy steering ever closer to a recession, you’d be forgiven for thinking that consumer borrowing would follow the downward trend, however, today’s figures from the Bank of England reveal that despite the toughening economic situation consumers have not turned away from borrowing to support their current financial needs.

“While business and consumer confidence may be at, or nearing, all-time lows in the first quarter, there still appears to be an appetite for credit from the nation’s consumers. Before Christmas, we saw an increase in the adoption of BNPL and so-called ‘pay day’ loans to make up the shortfall in earnings many were experiencing, and it seems this trend may continue into the new year.

“The credit sector will prove resilient in the face of ongoing uncertainty and while there are there are challenges to be faced, the sector will remain committed to providing customers support in navigating any economic uncertainties ahead.”

Paul Heywood, Chief Data & Analytics Officer at Equifax UK

Rates fall on Landbay’s HMO/MUFB range by up to 60bps

Landbay is reducing rates by up to 60 basis points across its range of buy-to-let mortgages for houses in multiple occupation (HMO) and multi-unit freehold blocks (MUFB).

The loan-to-value is 75% for these products and includes Landbay’s variable fee structure of between 2% and 3% for increased affordability around the interest coverage ratio (ICR).

In addition, new standard two-year fixed rates have been introduced at 4.94% with a 3% fee and 5.44% with a 2% fee, both are up to 75% LTV.

Example products up to 75% LTV:

  • Small HMO/MUFB 2 year fixed, 5.19%, 3% fee
  • Small HMO/MUFB 2 year fixed, 5.69%, 2% fee
  • Small HMO/MUFB 5 year fixed, 5.79%, 3% fee
  • Small HMO/MUFB 5 year fixed, 5.99%, 2% fee
  • Large HMO/MUFB 2 year fixed, 6.29%, 2.5% fee

Rob Stanton, business development director at Landbay, commented: “With swap rates continuing to edge downwards, we have been able to react quickly and reduce rates yet again.

“Our award winning broker portal, which we built in-house and launched last summer, allows us to make product changes swiftly. This means our rates can reflect what is going on in the money markets almost straight away.”

Foot Anstey’s Fraud Team celebrate Court of Appeal success in £70M conspiracy claim

The Fraud Team at national law firm Foot Anstey LLP has advised a former non-executive director of the auction house Bonhams on the successful dismissal of a £70M claim against him and various other parties (including Bonhams itself) following the obtaining of a recent decision in his favour from the Court of Appeal.

The Foot Anstey team was led by Steven Richards (Head of Fraud) and included Ben Hay (Managing Associate) and Adam Davies (Paralegal) who provided pragmatic and expert legal advice to the client in the context of successfully securing a dismissal of the claim.

The £70M claim related to the purchase and subsequent auction/sale of a high value collection of vintage Ferraris. At the heart of the dispute was an allegation that the defendants had collectively conspired to use unlawful means to injure the interests of the selling owner of the vehicles. In advancing this allegation, the owner sought to argue that it was not precluded from bringing the claim by virtue of the terms of a settlement agreement in connection with the auction process.

The team had previously advised the client in 2021 on a successful application to the High Court to strike out the claim. The owner then appealed this decision.

Following a three-day hearing in 2022, the Court of Appeal unanimously upheld the first instance decision. In doing so, the Court handed down a significant judgment on the interpretation of settlement agreements, and in particular on the question of whether a settlement agreement had the effect of releasing claims arising from fraud, conspiracy or other intentional wrongdoing, despite not expressly referring to such claims in its terms.

The full judgment can be accessed here.

Steven Richards, Head of Fraud at Foot Anstey, commented: “We are incredibly happy with the result as this provides our client with clear vindication in terms of the very serious and public allegations that had been advanced. The outcome is also testament to the team’s expertise, knowledge and capability in successfully advising on and achieving fantastic results on complex and high-profile fraud disputes.”

LiveMore secures up to £250m funding facility from Citi

LiveMore Capital has secured a credit facility of up to £250m from Citi taking total funding raised by the lender since inception to nearly £600m.

Set up in in 2020 as a mortgage lender to support the 50 to 90+ age segment, this new financing will enable LiveMore to increase loan originations and grow its portfolio.

Citi’s funding will also help LiveMore on the next steps in its journey to ‘reimagine later-life mortgages and mobilise the wider financial services industry towards fairer, more holistic lending practices to borrowers aged 50 to 90+’.

This credit facility will support LiveMore’s expanded product offering including retirement interest-only mortgages, term mortgages (both interest-only and repayment) as well as the soon to be launched equity release offering.

The expanded product offering and financing facility will enable LiveMore to grow as a solutions driven lender. It will continue to strive to provide the right outcome for older customers and allow borrowers to stay in their homes for longer.

Leon Diamond, CEO of LiveMore, commented: “We are thrilled to receive this credit facility from Citi, which will support our growth and expanded product offering, so we can continue to serve the often forgotten 50 to 90+ segment of the market.  As a result, we can help mobilise the industry around our mission to help 50 to 90+ year-old customers have genuine control of their financial lives.”

“LiveMore is on track to deliver over £1bn of mortgage lending to the 50 to 90+ age demographic in the coming years. We have listened to the regulators and our customers, and with the support of this credit facility, we can continue to provide options for later life borrowers underserved by high street lenders.”

Latest Fraud Figures Point To Continuing Threat of Advance Fee Fraud

“The latest fraud figures from the Office for National Statistics for the year to September 2022 show that bank and credit account fraud decreased by 14% to 2.1 million offences. This may be testament to the increasing levels of control that finance providers are putting in place to help stop fraud and raise awareness of scams.

“However, advanced fee fraud, which includes scams for services paid upfront that never arrive, has increased ninefold to 546,000 offences when compared with the year ending March 2020. This illustrates fraudsters adapting to changing habits, with consumers more susceptible than ever to phishing and online scams, such as bogus discounts, phoney competitions and fake offers as they explore online money saving deals.

“Our recent Consumer Pulse study showed that nearly half (48%)[1] of UK consumers were targeted by phishing activity in the last quarter of 2022, highlighting the scale of the continuing fraud threat and the need for businesses to continually evaluate and evolve their fraud prevention solutions to ensure consumers are protected.”

Josh Gunnell, director of fraud & ID at TransUnion in the UK

Data Privacy Day: Don’t put all your eggs in one basket

Privacy Day is of extra importance this year because of a dramatic increase in attacks designed to get around measures that make account log-ins more secure, and therefore protect our privacy.

For example, in mid-September, Uber reported a network breach that led to shutting down some of its internal communications and locking its codebase to prevent any new code changes. The attacker reportedly targeted a contractor by repeatedly sending multi-factor authentication login messages until the contractor accepted and gave the attacker access, according to Uber. Several days later, video game maker Rockstar Games announced it also had suffered a network intrusion from an unauthorised third party. The company says the attacker was able to gain confidential information, including early development footage for its upcoming and much anticipated game, Grand Theft Auto VI.

Social engineering attacks, when attempted by someone competent, are extremely hard to defend against as they target our human vulnerabilities rather than trying to bypass technology security.

In a 2019 paper from the SANS Software Security Institute, the most common vulnerabilities then, which are still relevant now, include:

  1. Business email compromise – Is a form of phishing attack where a criminal attempts to trick a senior executive (or budget holder) into transferring funds, or revealing sensitive information. Accounts that are only protected with only a password are easy targets.
  2. Legacy protocols – Can be the cause of a major vulnerability within your environment because some applications that use basic protocols, such as SMTP, were never designed to manage Multi-Factor Authentication (MFA). Hackers will search for opportunities to use outdated browsers or email applications to force the use of these less secure protocols.
  3. Password reuse – This is where password spray and credential stuffing attacks come into play. Common passwords and credentials compromised by attackers in public breaches are used against corporate accounts to try to gain access. In a Password Spraying attack, the attacker circumvents common countermeasures (e.g., account lock out) by “spraying” the same password across many accounts before trying another password. Credential stuffing is where the attacker collects stolen account credentials, typically consisting of lists of usernames and/or email addresses and the corresponding passwords (often from a data breach), and then uses the credentials to gain unauthorised access to user accounts on other systems through large-scale automated login requests directed against a web application.

To keep your and your company’s data secure, it’s vitally important to use strong passwords. BlueVoyant continues to observe large volumes of compromised credentials being sold on dark web forums, which are in turn used to breach victim organisations. Organisations should ensure they have monitoring in place to detect when their credentials are compromised and potentially being sold by cyber criminals.

In addition to password hygiene, MFA should be enabled by default across all organisations. Multi-factor authentication (MFA) adds another level of protection to merely using a password. MFA requires users to provide at least two verification factors in order to access a device or account. BlueVoyant has seen threat actors move on from potential victim organisations once they determine MFA is in place, and move on to an organisation that doesn’t have it.

However, given the uptick in organisations using MFA in their cyber defence, there has been a recent increase in MFA-bypass attacks. These attacks rely on social engineering techniques to lure and trick users into accepting fake MFA requests. Some specific methods of attacks include sending a large amount of MFA requests (MFA fatigue) and hoping the target finally accepts one to make the noise stop, or sending one or two prompts per day, which attracts less attention, but still has a good chance the target will accept the request. Attackers will also use more aggressive social engineering, such as Vishing (voice phishing) that requires calling the target, pretending to be part of the company, and telling the target they need to send an MFA request as part of a company process. Sometimes attackers even use bots to call, instead of a live person.

Despite the recent attacks, MFA remains an important part of cyber defence strategy for companies and individuals. To help make MFA as secure as possible, look for opportunities to use a code from an application instead of one sent via texting.

You could take a further leap and go passwordless. Protocols such as WebAuthn and CTAP2, which were ratified in 2018, have made it possible to remove passwords from the equation altogether. These standards, collectively known as the FIDO2 standard, ensure that user credentials are protected. The use of biometrics has become more mainstream after being popularised on mobile devices and laptops, making it a familiar and often preferred technology for many users.

Passwordless authentication technologies are not only more convenient for people but they are extremely difficult and costly for hackers to compromise, which is essentially what you are trying to accomplish with the attacker. A good privacy solution makes the return of investment for attacks so high that attackers will move on to much easier targets. So, to help protect your data, just remember; the defences ensuring your data privacy should have many layers of protection. Don’t give the attacker just one hurdle to overcome, aim to make it as difficult as possible. Stay safe out there and happy Privacy Day!

By Tom Huckle, Director of Information Security and Compliance, EMEA, BlueVoyant

Knowledge Bank launches industry’s first interactive criteria guide

Knowledge Bank, the UK’s largest database of mortgage lending criteria, has launched a bespoke interactive criteria guide for lenders to promote their criteria in more places than ever to brokers.

The guide is the first of its kind and gives lenders the ability to promote their criteria not only on their website but on email footers, at shows and events via QR code or on social media. Fully searchable, it provides detailed information on all of the lending types supported by the lender and facilitates real-time updates to criteria.

The interactive criteria guide is both cost effective and environmentally friendly as it removes the need for lenders to be continually updating and printing literature. It is also provides lenders with a much more robust tool than PDF’s on websites as the detail with regards to the wording comes directly from what the lender inputs into Knowledge Bank providing consistency and uniformity across all of their communications to significantly reduce the number of cases received that can’t progress due to misunderstandings around criteria.

Being interactive, it is fully searchable and utilises Knowledge Bank’s exclusive “smart search” features which enables brokers to find exactly what they’re looking for taking into account the different names, terms or spellings used.

Mike Walters, Sales Director – Mortgages for United Trust Bank who were the first lender to take advantage of Knowledge Bank’s latest development said: “We’re always looking for ways to help brokers write and complete more business and this initiative continues our investment in innovative technology which both simplifies and accelerates the broker journey from sourcing to pay out. We’re big fans of Knowledge Bank and it’s great to work with a company which shares our desire to develop technology which really adds value.”

Nicola Firth at Knowledge Bank said, “This new interactive criteria guide is a terrific example of the technological advancements now available for lenders to proactively improve the process of working with brokers. The days of lenders having to constantly update and print our criteria guides are a thing of the past and this is another example of technology improving the mortgage advice process.

“By using criteria search systems brokers can now save themselves hours and hours and the digital criteria guide will further simplify the process and offer reassurance that the data they are using is accurate and up to date and they won’t be caught out by criteria announcements they may have missed.”

Allica Bank extends funding range to include soft assets as it hits £200m of asset finance lending

Allica Bank, the fintech challenger bank dedicated to supporting UK small and medium businesses, has extended its asset finance proposition to include soft assets to meet the demand from its brokers and customers. The bank is offering financial support to help businesses finance soft assets, which may include the acquisition of IT, telecoms or security equipment, and further increasing the ways that businesses can increase their cashflow.

This launch comes as the bank reaches a £200 million milestone in asset financing since its launch in 2021 and follows its £100 million milestone met just seven months ago.

Allica Bank says that the extension of its asset finance proposition comes in direct response to extensive broker feedback received in Q4 2022, evidencing Allica’s dedication to listening to its brokers and customers, and adapting to a changing economy.

Allica has also been accredited to the new iteration of The British Business Bank’s Recovery Loan Scheme (RLS), where it had already extended its asset finance offering to include medium assets such as broadcast, garage and textile equipment, robotics and more. Businesses can apply to access Allica’s hard, medium and soft asset finance through the RLS.

Brandon Hall, Head of Sales for Asset Finance at Allica Bank, said this is a significant milestone for the asset finance team: “In an incredibly challenging economic environment, we are pleased to support even more SMEs who have a clear ambition to continue to invest and grow, as evidenced by our reaching £200 million in funding in just two years.

“Through our broker survey we received extensive feedback that soft assets were increasingly important and it’s vital for us to proactively support UK businesses and broker communities with the demand. We are therefore extremely pleased to extend our proposition to soft assets, and especially to provide it through the RLS, allowing us to offer more favourable terms.

“Allica is fast developing into a one-stop shop for asset finance brokers, and we will keep innovating to make sure our offer is centred on their insight.”

Banks’ continuing AML shortfalls risk “eye-watering” fines

A “worrying” number of banks and financial institutions are still risking multi-million pound fines like the £107m penalty issued to Santander at the end of last year, an anti-money laundering expert has warned.

The lender was censured by the FCA in December for a range of anti- money-laundering (AML) shortfalls between 2012 and 2017, with the regulator particularly highlighting its failure to adequately verify the information provided by business customers about the business they would be doing.

But a comprehensive survey of regulated firms commissioned by SmartSearch saw more than a quarter of finance and banking firms admitting to similar AML shortcomings.

Up to 26 per cent said they either did not carry out any verification checks on new business clients or did so just “some of the time”.

And almost half (45 per cent) of the banking and finance firms who responded disclosed that they did not identify the ultimate beneficial owners of the new companies they dealt with – a loophole often exploited by money laundering criminals, who create complicated corporate infrastructures to hide the real recipients of criminal activity.

The survey saw decision-makers in 500 regulated UK businesses from the legal, property and finance sectors questioned on a range of compliance issues.

Martin Cheek, managing director of SmartSearch said: “Despite the high profile, eye-watering levels of financial and reputational damage which come with breaches, these responses show a worrying continued lack of due diligence when it comes to compliance. And if that weren’t concerning enough, failing to verify ultimate beneficial owner checks can also see regulated firms sleepwalking into dealing with Politically Exposed Persons and people on sanctions lists.”

Mr Cheek, a trained lawyer, added: “In fact, regulated firms are legally bound to identify ultimate beneficiaries as part of their compliance procedures. But, without the advanced technology of a proper compliance solution, unravelling layers of companies to find ultimate beneficiaries is an almost impossible undertaking.

“This is a clear indication that the banking sector should be investing in electronic verification (EV) and a digital compliance solution which includes fast, comprehensive ultimate beneficiary checks. The use of EV is recommended in the 2020 Money Laundering and Terrorist Finance Act as part of regulated firms’ compliance procedures.”

Four out of 10 buy-to-let landlords intend to buy more property

More than four out of 10 buy-to-let landlords (42%) intend to purchase additional property in the next 12 months, the Landbay quarterly landlord survey has revealed.

Despite ongoing pressures on landlords, 79% of those intending to buy said they do not plan to sell any of their existing properties. The strongest intention came from landlords with larger portfolios, with half of all landlords with 11 or more properties planning to expand.

One out of five (21%) said they don’t know if they will buy more property, with most of those planning to wait and see what happens in the market.

Meanwhile, many of the 37% not intending to buy said they are content with their existing portfolio. In fact, 64% of those landlords don’t intend to sell any either.

All is revealed in Landbay’s latest quarterly survey which questions existing landlords on a range of topics to find out their attitude and intentions. The survey uncovered the key factors facing landlords and their thoughts on the future of the buy-to-let market.

Paul Brett, Landbay’s managing director, intermediaries said: “Rather than a ‘mass exodus’, this latest data shows a real statement of intent among landlords to not only maintain their existing portfolios but to expand. This is hugely encouraging given the myriad of challenges facing landlords and the wider buy-to-let sector.

“Landlords will be encouraged by the news of rates trickling down recently. With the new year bringing lots of positive indicators for the year, plus strong rental yields still reported by many respondents, landlords clearly have the confidence to push ahead with expansion plans.”