Fraud is something we should all be concerned about

 Gavin Diamond is finance director of Cheval



The research finding published earlier this year by Experian that the mortgage industry was hit by a 23% jump in attempted fraud between April and June 2012 is something that everyone in mortgage lending should be concerned about.

Bridging applications can often proceed to payout within days rather than weeks. We act swiftly to ensure clients get their short-term finance in a timely fashion and, unlike long-term mortgage lenders, work to our clients’ schedule.

This means we have to perform all the usual checks, while at the same time striving to ensure we don’t hold up a deal.  Naturally this makes us particularly susceptible to fraudulent applications. 

From our perspective, there are a number of key sources of fraud risk: applicants misrepresenting their personal circumstances or misrepresenting the use to which funds will be put, third-party identity fraudsters wanting to launder money, and fraud committed by solicitors on behalf of their clients.

 In order to crack down on activity in these areas we recently made a couple of key changes to our underwriting.

We are visiting prospective borrowers in their homes to verify ID and application information provided.

And we are now placing additional restrictions on the solicitor firms we will allow to act for our borrowers.

Neither of these changes are having a negative impact on our service levels and turnaround times. In fact, in many respects, our customers are actually noticing improved service levels. Because satisfaction of both ID and application information is being dealt with more quickly, successful applications are progressing more rapidly to payout.

We believe that the changes we have put in place will, over the coming months, have a big impact in dissuading fraudsters from approaching Cheval with applications.