NACFB launches fraud committee

The National Association of Commercial Finance Brokers (NACFB) has formed a new industry body that will work closely with government bodies and the police to counter the re-emergence of advanced fee fraud in the sector.

The NACFB Fraud Intelligence Committee was officially launched last month, following increasing reports that the practice was on the rise again after initially emerging in the late 80s and early 90s.

The launch follows reports that some brokers had been purporting to be lenders, or were charging large, up-front fees without ever intending to help fund a proposal. The body warned that brokers unfamiliar with the sector - including residential mortgage brokers - were at risk of being targeted.

The NACFB was originally formed to combat advanced fee fraud and successfully eradicated this activity from the market after the practice peaked in 1992.

The committee - which consists of one of the original members of the association, representatives from the NACFB board and compliance committee, along with a senior member of CID - will look at each of these cases and gather evidence from both sides.

The newly-formed body will then either dismiss the case if no wrongdoing is found, or the matter will be referred to the police and then to the Office of Fair Trading (OFT), so that any consumer credit licence can be revoked and criminal investigations can proceed.

Adam Tyler, chief executive of the NACFB, warned brokers to be vigilant, as those with less experience in the commercial market could be caught out if they did not question deals that seem 'too good to be true'.

Tyler said: "This has not affected the reputation of the sector yet, but it will, which is why we are taking steps now to prevent this. We do not want things to progress again the way they unfolded in 1992."