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UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to for wider content and updates from UK Finance.

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Lenders welcome launch of anti-fraud scheme


Published: 7 September 2011 | Author: Bernard Clarke

Lenders are supporting a new scheme launched at the start of this month to help combat mortgage fraud.

During the summer, we have been working with HM Revenue & Customs (HMRC) and the Building Societies’ Association on the pilot of a new income verification scheme. Now, when lenders receive a mortgage application that does not have enough evidence of declared income, or where they suspect fraud, they will be able to check the information they have been given against tax and employment returns held by HMRC.

Lenders already make their own rigorous checks, but the new mortgage verification scheme will provide a useful additional tool in cases where firms do not have enough information or where they reasonably suspect that fraud may be taking place. The National Fraud Authority has estimated the cost of mortgage fraud at £1 billion a year, but applicants making false claims about income account for only a small proportion of the fraud that lenders encounter. 

Firms using the new scheme will submit details of income declared in support of a mortgage application to HMRC via a secure platform. The tax authority will then tell the lender whether or not the details correspond with its own information, leaving firms in a better position to judge whether the application is fraudulent or not. 

HMRC has set up a special unit to deal with requests from lenders, and any firm that wishes to use the scheme is free to do so. Lenders will have to pay a fee of £14 per case to cover HMRC’s costs but there are no other charges and running an application through the scheme is not expected to lead to any significant delay in making a lending decision.

As well as helping to combat fraud, data from HMRC will also help firms lend responsibly and manage risk. During the pilot, the scheme has also given some lenders confidence about a borrower’s credentials in cases where they might otherwise have felt compelled to refuse an application.