NFSA sets out fraud fight expectations

The National Fraud Strategic Authority (NFSA) has revealed that it is to perform a review of its fight against mortgage fraud in November, and expects to find greater intelligence sharing across the mortgage community to identify trends, enhance counter-measures and shut fraudsters out of the financial system.

The body last week published a National Fraud Strategy, aimed at cracking down on fraudsters undermining the UK economy, which includes the establishment of a National Fraud Reporting Centre and a National Fraud Intelligence Bureau.

In the report, the NFSA hailed the success of the Mortgage Fraud Taskforce it has established, bringing together 20 private and public bodies involved in the sector to orchestrate a co-ordinated and joined up response to mortgage fraud and improve the sharing of key data.

Early results have already led to a pilot scheme between lenders and HM Revenue & Customs to check the authenticity of documentation used to prove identities. It has so far prevented £16m of fraudulent transactions.

The NFSA said: "The downturn in the housing market has shed significant light on the extent to which criminals have exploited the mortgage process to defraud lenders. While the losses involved represent only a small fraction of the overall mortgage market, they form one of the most significant elements of the nation's overall exposure to serious fraud."

The follow-up report will be co-ordinated by the FSA, the Council of Mortgage Lenders and the City of London Police, as well as the NFSA. The NFSA said it expects to see evidence of a number of key objectives in the report, including the aim that financial institutions are better able to identify and prevent mortgage fraud attempts through the greater sharing of good practice and the use of the most effective fraud prevention tools and techniques.

It also wants to see an increased ability to root out corrupt or criminal individuals who infiltrate the mortgage process - including mortgage brokers - so that they face a credible threat of detection and sanction. Earlier this month, nine people were arrested in connection with a suspected £40m mortgage fraud, centring on a mortgage brokerage based in East Sussex.