Advisers have duty of care as fraudsters step up scam activity

Bob Hunt

17 August 2020

'Time and tide wait for no man...' Well over six hundred years after Chaucer wrote those words, we might justifiably add 'fraud' to that particular list.

This is especially so during the pandemic when fraudsters appear to have not only stepped up their activity but are utilising Covid-19 as a way to extricate people from their money.

With many people experiencing real financial worries, even the most vigilant could be persuaded to part with personal or banking details or hard-earned cash - duped into thinking government was requesting them, or they were eligible for greater levels of support.

Research from UK Finance highlighted ten Covid-19-related scams that were currently being perpetrated and which people needed to be wary of.

These went from fake government emails offering grants in exchange for personal or financial details, to potential Council Tax reductions, and emails from 'TV Licensing' offering six months free.

All communications I'm sure look, on the surface, convincing and - when people might be feeling desperate or overwhelmed - there could be a tendency to provide information without even thinking.

Unfortunately, that's exactly what the fraudsters want.

Advisers are a line of defence

Of course, in the mortgage market, we are no strangers to the attempted perpetration of fraud, especially when dealing with such large transactional sums and, where potentially, heads might be turned by the thought of pocketing them.

At its most base level we have income fraud, shown via fake payslips/banking details.

But there's also the potential for self-employed individuals masquerading as employed, or those who appear to be employed by a family business.

And of course there are also identity theft, and attempts to hijack properties and remortgage them, not forgetting the targeting of clients by fraudsters pretending to be conveyancers or the lender itself.

Advisers are certainly one line of defence in trying to stop fraud and, for the most part, we as an industry are very successful at doing this.

Let's be frank, some of these attempts can be crude to say the least and there are normally multiple giveaways which, at the very least, should raise suspicions that can be identified and investigated.

Others will be more sophisticated, and clearly with the increased use of technology within the property process, there are opportunities to use technology to defraud more than ever before.

However, the very same technology can also be used to combat the fraudsters particularly in areas like identity and documentation checking or having secure systems that cannot be infiltrated.

Duty of care to borrowers

Advisers also have a duty of care to their clients and part of that will be around the potential for fraudsters to target them.

In that regard, clients should be warned about publicising their property transactions via social media and the like, because undoubtedly fraudsters will use that information to try and access emails and infiltrate the process.

To help advisers with anti-fraud activity we recently updated our eBook on fraud prevention and what firms should be aware of.

At a time when the last thing anyone would want is to be a victim of mortgage fraud, putting in place these robust measures and making your clients aware of the potential threat will go a long way to countering the fraudsters.

Unfortunately, they are not going away anytime soon.