From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

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.

  1. Home
  2. News
  3. News & Views
  4. Lenders support joined-up initiative to combat fraud

Lenders support joined-up initiative to combat fraud


Published: 18 October 2011 | Author: Bernard Clarke

Mortgage fraud has been estimated by the National Fraud Authority (NFA) to total £1 billion, accounting for around 2.5% of the £38 billion annual cost of financial crime in the UK. Fraud targeted against lenders encompasses a wide range of crimes – from submitting inflated claims of income in support of an individual mortgage application to much more systematic and often highly organised criminal behaviour. But lenders remain dedicated to detecting and deterring fraud however it occurs.

In support of the continuing commitment of the wider lending industry and of individual firms to tackling fraud, the CML has added its support to a new initiative to help promote better co-ordinated and inter-linked activity by a range of partners to target financial crime.

On behalf of lenders, the CML is supporting the new Fighting Fraud Together strategy, launched last week by the National Fraud Authority. The CML is one of 37 separate organisations that have joined together in support of this initiative. It is the first time that a range of government organisations, industry representative bodies like the CML, law enforcement agencies, regulators and voluntary groups have joined together on such a large scale to tackle fraud.

Working together

Like other supporters of the initiative, the CML advocates expanding and extending the range of successful activities that already exists in the lending industry to target fraud. The CML also remains committed to sharing intelligence about fraud across different organisations to prevent and disrupt the activities of criminals.

Police, led by the City of London force, will continue to lead the front line in the fight against financial crime. In addition, the new initiative sets out to deliver greater intelligence capabilities to the National Fraud Intelligence Bureau, with the ain of disrupting the activities of fraudsters and rapidly closing down the channels through which they operate and launder money. Other priorities for the initiative include:

  • information-sharing between industry and the public sector to help prevent fraud attacks; and
  • a new research tool that will help all sectors to provide more targeted prevention advice to the public, particularly vulnerable people, and to develop a better understanding of the vulnerability to fraud of small businesses and the support they need.

The new initiative has also been endorsed by the government. Crime and security minister James Brokenshire said: "I applaud the different organisations and industry groups that have joined together to play their own part in Fighting Fraud Together. By sharing what we know, we will reduce fraud. This new strategy is important to better target, prosecute and prevent it."

The CML recognises that supporting the new strategy, which seeks to integrate and co-ordinate the activities of a large number of different types of organisation, will deliver wider benefits in the common cause of tackling financial crime.

Other anti-fraud measures

Support for the new initiative sits comfortably alongside a series of other activities to tackle financial crime that the CML and individual lenders already pursue – or contribute to in other organisations. These include:

  • The Financial Services Authority’s 'information from lenders' scheme, launched in 2006, following discussions with the CML. This scheme provides a channel through which individual cases of proven or suspected fraud can be reported by lenders to the regulator.

One of the advantages of this initiative is that lenders can report snippets of information or even just suspicions to the FSA. An individual lender may not have enough evidence to take further action, but the FSA may be able to pool data from a range of different sources to bring about a successful prosecution or take other disciplinary action.

Last year, the FSA said that, over the preceding four years, the information from lenders scheme hade generated 700 alerts and 100 enforcement cases, resulting in the banning of 80 mortgage intermediaries involved in criminal behaviour and the imposition of fines totalling more than £1 million.

  • The activities of the National Fraud Authority (NFA). Set up as an arms length government body in 2007 to provide a focus for co-ordinated anti-fraud activity, the NFA meets several times a year with the CML and other major players working together to target financial crime.

In particular, the CML has supported work specifically to tackle mortgage fraud, on which the NFA published a detailed report that was updated again last year. The NFA has developed a joint plan of action, supported by organisations in the public and private sector, including the CML. This has led to the establishment of a mortgage fraud forum to work across the industry.

The NFA acknowledges that lenders have made a number of operational changes to the way they run their businesses that have helped address some of the problems of mortgage fraud. In last year’s updated report, the NFA’s then chief executive, Bernard Herdan, said: "With the industry pulling together, substantial inroads have been made to tighten systems and controls, regulate professionals and share knowledge."

  • The mortgage verification scheme, launched this September in collaboration with HM Revenue & Customs (HMRC). Under the scheme, lenders can refer details of mortgage applications to HMRC, via a secure electronic platform, if, as a result of carrying out their own rigorous checks, they suspect that fraud may be taking place.

Details submitted by a mortgage applicant are then checked against information provided to HMRC in income tax and employment returns, with the lender alerted to any discrepancies. As well as helping detect fraudulent mortgage applications, the scheme also provides data that helps firms lend responsibly and manage risk. Additionally, the information shared with HMRC helps the tax authority assess whether information it has been given is correct.

  • Co-ordinated activities with a range of other representative bodies and other agencies to combat fraud by professionals working alongside mortgage lenders. The CML works closely with the Law Society, the Royal Institution of Chartered Surveyors, the Solicitors Regulation Authority, the Council for Licensed Conveyancers, the Land Registry and others on measures to detect and combat fraud committed by solicitors, conveyancers and other professionals working in the housing transaction process.
  • Working with other bodies representing lenders to pool information and co-ordinate action against mortgage fraud. The CML continues to share information and monitor developments on fraud with the Building Societies Association and the British Bankers’ Association, as well as with bodies like UK Payments.
  • Supporting a wide range of initiatives, based on data analysis and sharing – and sometimes supplied as commercial services to lenders – that help detect and prevent fraud. The CML and individual lenders have worked with a number of different suppliers and other organisations offering services to lenders, including National Hunter, National SIRA, the fraud prevention service CIFAS and a range of commercial providers.

Finally, the CML continues to operate its own financial crime panel, which is made up of a range of members. It meets quarterly to provide a forum for lenders to discuss the latest developments on financial crime and policy, including measures to combat money laundering, identity fraud and a range of other issues.


Mortgage transactions often involve significant sums of money and are therefore an attractive target for criminals, some of whom are well organised and develop sophisticated strategies for attempting to defraud firms. Fraud directed at lenders is increasingly complex, and evolving market conditions and new practices within the lending industry and the professions working alongside it may create new opportunities that criminals may seek to exploit.

However, individual firms, and the CML, are alert to the problems and remain committed to targeting criminal activity in all its forms. The industry works closely with law enforcement and other government agencies, the FSA, professional representative organisations and other trade bodies, and with commercial suppliers of information services and individual firms.

The CML continues to develop new alliances with other organisations and to work on innovative ways of protecting lenders from criminal behaviour, most recently by its support this autumn for the Fighting Fraud Together initiative and its work with HMRC on the launch of the new income verification scheme. It will continue to ensure that tackling mortgage fraud remains one of its highest priorities.