Following your feedback we've launched our Financial Crime newsletter , to bring you regular insights to the latest developments, trends and updates from across the market, to help you keep your business and your customers safe from financial crime.

This area accounts for the biggest percentage of declines on residential transactions. First Time Buyers generally have a larger percentage of frauds in this area compared to all buyer types. See the link below for some hints and tips on income checks that can be done.

Due to a heavier reliance in personal income in the BTL market space following the tax changes in 2016 and the PRA underwriting standards in 2017, this area is also one where income and employment fraud tend to be a hot topic.

There has been instances where the client has had an email purporting to be the solicitor which asks them to pay the deposit into a specific bank account but the solicitors emails has been infiltrated. The client pays the money into this account unknowingly and the deposit is lost. Please make your clients aware of this and ask them to check by phone with the solicitor that the details are correct.  

Fraudsters will act as tenants and go through the motions to rent out a property using fake ID documents and it will normally present as a capital raising re-mortgage on an unencumbered property. Once approved, one of the tenants will proceed to change their name by deed poll to match the owner’s name, which will be stated in their tenancy agreement. With the owner’s name and matching fake documents, the rogue tenant can then go to an estate agent to put the property on the market and request to sell it. Your clients can protect their property using the Land Registry Property Alert Service, which provides an alert if anyone tries to deal with the property. The alert would be sent to the client by email if anyone carries out an official search or makes an application in relation to your property.

Although not top of the list, this does still happen, usually on either a BTL application for a residential purchase or vise versa. 

Fraudulent introducers, (some might previously been advisers and have been taken off lender panels) will approach an adviser or firm to offer to introduce business to them. If an introducer approaches you with an opportunity that sounds to good to be true, be aware, it probably is. 

There is a relatively new corporate offence of the Failure to Prevent the Facilitation of Tax Evasion which came into effect on 30th September 2017. A common example is the identification/suspicion that a customer may not be declaring rental income for tax purposes. Failing to identify and report the facilitation of financial crime (tax evasion) could have serious consequences, such as a removal from the lender’s panel and/or prosecution with the relevant agencies.

The most common stage for money laundering to occur in a mortgage advice process is when dealing with a customer’s deposit. In this part of the process you are dealing with large sums of money and you must know where that money is coming from in order to satisfy yourself that it is not the proceeds of crime. There should be lots of considerations made to the plausibility of where that money has come from, any increased risk such as involvement in a cash business or funds coming from a high risk country. All of these should help build a picture of the customer and their wealth.