According to a Freedom of Information request sent by Thirdfort, a client due diligence platform, to the Financial Conduct Authority (FCA), the number of enforcement investigations into mortgage fraud peaked at five in 2019.
Mortgage fraud often involves forged documentation, fake identities, or income misrepresentation to deceive lenders.
Activity then dropped off in 2020 and 2021, potentially due to pandemic-related disruption, and then picked up to 3-4 cases per year between 2022 and 2024.
|
Year
|
Number of investigations
|
|
2018
|
2
|
|
2019
|
5
|
|
2020
|
0
|
|
2021
|
0
|
|
2022
|
3
|
|
2023
|
4
|
|
2024
|
3
|
|
Total
|
17
|
However, the firm said wider industry data shows a “different picture”, adding that it is “widespread and significantly under-reported”.
For instance, industry statistics from UK Finance suggest that there was around £1.17bn lost to fraud in 2023, the latest figures available.
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Cifas data also suggests that one in six adults admit to or know someone who has misled a lender to secure a mortgage, noting that AI-generated fake documents and identity fraud were making fraud detection more challenging.
Olly Thornton-Berry, co-founder and CEO of Thirdfort, said: “These figures suggest that the number of mortgage fraud investigations is relatively low, but of course that’s not the full picture.
“In the UK, in addition to the FCA, the Serious Fraud Office (SFO), local police forces, and the National Crime Agency (NCA) all play a role in investigating cases involving suspected mortgage fraud. Moreover, with fraudsters becoming more sophisticated, and industry data telling a different story, it’s likely that there’s a significant amount of fraudulent activity going undetected.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: FCA mortgage fraud investigations ‘relatively low’ but ‘significant amount of activity going undetected’, firm warns
