MFAA warns brokers about fraud

The MFAA call follows recent accusations that brokers are responsible for an increase in fraud. Last month, Veda implied that some brokers are involved in premeditated fraudulent activities to defraud lenders.

“What we see through some of the third-party channels tends to be more organised crime with collusion between parties,” said Imelda Newton, general manager of fraud & identity solutions.

Just one week ago Veda reported that there has been a 52 per cent jump in suspicious credit applications in the past two years.

G’day Mortgages & Loans owner Andrew Potter said brokers would inevitably be blamed if they submitted questionable loans.

Mr Potter said his Brisbane firm is vigilant about checking the bona fides of clients and their documents, and that brokers need to ask questions when something doesn’t feel right.

“If you’ve got an average broker doing his average job doing his average due diligence, in theory it [fraud] shouldn’t happen,” he said.

GM Tax & Loans director Giuseppe Mastrantuone said his long-term clients are easy to verify, because he’s also an accountant and has been doing their tax returns for years.

However, he is a lot more wary when he deals with new clients, he added.

Mr Mastrantuone said he is particularly alert when clients claim to work for small companies or companies he’s never heard of, because the link between the client and employer can be unclear.

Another warning sign is when clients claim to get paid in cash, he told The Adviser.

The MFAA reminded members that they need to confirm that customer-supplied copies of bank statements, payslips and identification documents are true copies of the originals.

“One of the main issues reported through the MFAA disciplinary process over recent times relates to the failure to confirm that documents are authentic copies of an original,” the association said.

[Related: MFAA takes aim at big four banks]