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Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

In-House Fraud

Author: Syedur Rahman  31 August 2016
3 min read

Figures from this decade have indicated that instances of fraud during mortgage and property transactions have risen by 50% from one year to the next. Such crime has been known to account for more than 1/20th of all recorded fraud.

The statistics are stark enough, especially when it is considered that mortgage and property transactions tend to involve very large sums of money. Such fraud can involve innocent people losing vast amounts through no fault of their own – often to people who are never apprehended for the criminal activity.

But when such an incident occurs, the investigating authorities have one clear starting point for their inquiries: the professionals who were involved in the transaction (or chain of transactions) from which the money was stolen. Identity theft has seen people impersonating the recently deceased to make fraudulent mortgage applications or even pretend to be solicitors to trick buyers (or the lender of the funds) into sending them large sums of money. More commonly, large amounts of money are stolen by the criminals hacking databases or intercepting emails between buyers and their solicitors.

Experian has estimated that an average of £76,166 is lost in each example of mortgage or property transaction fraud. This can lead to victims looking to property professionals for compensation if they feel they are to blame. It can also lead to many in the transaction coming under intense scrutiny from investigators. Both of these outcomes can be exceedingly damaging to the reputation or finances of those placed under suspicion. So you need to know how to prevent it.

How can in-house fraud be Prevented?

At Rahman Ravelli, we have wide experience of conducting internal investigations for companies and other organisations that either suspect wrongdoing under their roof or are keen to make sure it never happens. Such investigations are a valuable way of identifying the potential for fraud and of introducing measures to prevent it happening.

In many such cases, a company can use an internal investigation to resolve a fraud issue without the need to involve law enforcement agencies. In this way, the matter can be resolved swiftly within the organisation; which has the option of bringing disciplinary action or even a civil legal action against those it believes are responsible for the suspected fraud. This can mean less damage to the company’s reputation than a criminal investigation; although this is always an option.

But while an internal investigation is a useful tool, making some basic checks can reduce the need to ever have one.

Some simple questions can help weed out potential fraud: 

  • Check the exact identities of the other parties involved in the deal
  • Question the real purpose of the deal 
  • Make thorough investigations into the background of the buyer, seller or borrower and establish their right to be involved in such a transaction. 

If there is a hint of suspicion, act on it - either by conducting an investigation or by alerting the authorities. The stakes are too high for those in property to simply plod on, oblivious to the risks. The Financial Conduct Authority (FCA) has produced guidance on how lenders can report suspicions and similar property professionals’ organisations have also made advice available. It would be foolish not to make use of it.

Defending Fraud Allegations

If you are the chief suspect in either a criminal or internal corporate investigation you could lose much more than your job if found liable for workplace fraud. Criminal charges, professional disqualification, reputational damage and the inability to ever find similar work are all likely - more than ten mortgage brokers a year are barred from the industry because of wrongdoing.

At Rahman Ravelli, we regularly represent large numbers of property professionals from all parts of the transaction chain: estate agents, surveyors, mortgage brokers, developers and many other experts who are involved in real estate deals. Anyone accused of such an offence needs to quickly find a legal team that can analyse all the evidence, seek more information , use expert witnesses intelligently and proactively challenge the prosecution to establish innocence and protect a person’s professional standing. Such legal representatives, such as ourselves, have extensive experience of dealing with the likes of the Serious Fraud Office (SFO), the FCA or the economic crime units of regional police forces, who may be conducting the investigation.

The reasons for an increase in such fraud may not be clear cut. We could look at the property price rises, we could cite bank lending policies or even point out possible security weaknesses in online transaction arrangements. All may play their part.

But in order to avoid being held liable for such illegal activity, any property professional has to take some action themselves to reduce the likelihood of them being accused of fraud. Such a likelihood is far larger than it was a decade ago. Property fraud is increasing and the authorities are meeting this using greater cooperation, better investigative skills and improved technology. Property professionals have to respond to this.

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Syedur Rahman C 09551

Syedur Rahman

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syedur.rahman@rahmanravelli.co.uk
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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.

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