So tell me something I don’t already know!
Researchers at KPMG have been playing with their abacuses in recent weeks and calculate that the number of cases of mortgage fraud in the UK has almost quadrupled in the first six months of 2010 – reaching an unwelcome 22-year high!
The accountancy giant’s Fraud Barometer has found there were 166 cases of mortgage fraud in the first half of the year with a collective value of £608.5m. And the company has warned that the picture is set to deteriorate over the coming months as the aftermath of the house-price boom, followed by the credit crunch, results in more incidents being unearthed.
While KPMG’s research is very helpful, the reality is that any fraud professional would be able to tell you the UK mortgage industry has a problem with fraud – and it’s not going to go away in the short term.
Devising solutions that counter fraud dominates my working week. And I despair when I hear that the problem is getting worse; after all, the technology and processes are at our fingertips to make the problem a lot more manageable than it presently is. If we took a more proactive approach to addressing mortgage fraud, the many white-collar professionals (solicitors, chartered surveyors, accountants and intermediaries) who seem to be the driving force behind ripping off lenders wouldn’t be able to get away with the vast majority of the scams they organise. The people who are largely responsible for driving this type of crime to unprecedented heights would be rigorously monitored thereby ensuring they couldn’t pull many of the stunts they currently get away with.
To some extent, KPMG’s research confirms this view. It says managers in companies have been found to have carried out far greater fraud damage than their employees. Though there were more employee cases than management ones (47 compared to 32), management frauds had a greater value, at £135m compared with £45m. Manager frauds averaged £4m per case compared to £1m per case involving employees. Professional criminals committed a total of 56 cases, with a value of £391m.
KPMG says companies who took fraud risk management seriously before the downturn should now be emerging stronger because of it. The discipline that they have subjected their businesses to should help them gain a competitive advantage.
I totally agree. And I urge any organisations that are serious about tackling the problem to move quickly. They will be pleasantly surprised at the range of solutions that are available – which cater for all sizes of corporate wallet and IT infrastructures…