Martin Cheek, MD at anti-money laundering firm SmartSearch comments on today’s figures from Cifas which show a significant increase in the use of false documents in mortgage applications.
“According to the latest figures from Cifas, mortgage fraud by production of a false document has increased by 14% in the first 6 months of 2019 compared to the previous 6 months, while fraud by submitting altered documents has risen by 32%.
“Mortgage applications may not traditionally be the area you’d associate with fraud; this significant increase shows that it is a vulnerable sector of the market. And while lenders and brokers will never stop people trying to commit fraud, they can stop them succeeding by ensuring their KYC processes are fit for purpose.
“All mortgage fraud – whether that is to exaggerate income to get a better deal, or for more sinister reasons such as money laundering – has been perpetrated on the back of forged documents, but there has never been a fraudulent case linked to electronic verification.
“That is because electronic identification offers the most efficient and reliable way to check if someone is who they say they are and their documents are real. Banks and other lenders should be looking to switch to electronic verification now, not only because it will help put a stop to mortgage fraud, but because in January the 5th anti-money laundering directive comes into force and stipulates that electronic verification should be used by regulated sectors wherever possible.”