In light of the recent news that West One Loans seemingly failed to check the Association of Short Term Lenders’ (astl) fraud register, a resource available to all lender members, which would have uncovered a listing of the fraudster involved in the on-going court case with Salkled Investments Ltd, B&C decided to research how many lenders actually do check the register.
Our investigation has revealed that 73 per cent of astl members DO check the astl Information Register as part of their respective best practice and due diligence procedures.
Bob Sturges, Head of Communications at astl member Omni Capital, said: “We do refer to the astl fraud register and it is just one component of a series of checks and controls we deploy to mitigate the risk of fraud. No system can ever be 100 per cent foolproof, but lenders have at their disposal a pretty impressive array of anti-fraud tools, not least of which is the skill and experience of trained underwriters.”
B&C asked astl members whether they check the astl fraud register as part of their respective best practice and due diligence procedures and 73 per cent of astl members said that they would always check the register as part of their fraud checks.
Nine per cent of members stated that they don’t regularly use the facility as part of their due diligence procedures, and 18 per cent of members refused to comment.
Describing the intention of the register, Benson Hersch, Chief Executive Officer of astl, told B&C: “The astl Information Register is to alert members to anything that may be untoward so that they are aware of anything that may be happening in the marketplace. Often fraudsters will target a few lenders with similar deals so this database helps to prevent this from happening. Lenders are always urged to check and contribute towards the register.”
Mark Posniak, Head of Marketing and Operations at Dragonfly Property Finance, stated: “As a member of the astl, we check the register but it is one in a long list of checks which we make as part of our underwriting process.”
Laurence Goodman, Managing Director at Bridgebank Capital, added: “We are in the habit of checking the register regularly. In fact, we subscribe to it and are one of the few lenders who upload relevant details to astl. We feel that there are a number of astl members who aren’t using it to identify fraud within the industry.”
Last month, B&C unearthed that the ‘applicant’ and fraudulent activity of the fraudster who had duped West One Loans was already listed on the astl Information Register at the time of the advance.
Astl Executive Committee member and CEO of West One Loans, Mark Abrahams, hit back in the media at allegations that it had acted in breach of contract after the ID fraudster targeted the lender and its investors.
In the statement Mr Abrahams, referring to the sophisticated identity fraud and the lender’s fraud checks, stated: “We always use the latest electronic identification software and will never proceed unless the borrowers’ identity has been verified by the company and a solicitor. West One Loans advanced the full amount of the loan to an individual whose passport and identity had been subject to a full ID fraud check.”
An ex-Executive Committee member, requesting to remain anonymous, said: “Checking the astl fraud register forms part of a wide range of checks and searches which we can perform on customers. It would be crazy not to use it if you had access to such a resource.”
The results of our investigation indicate that it is common practice for lender members to check the astl fraud register, although it does highlight that not enough lenders are actually utilising the facility, and indeed uploading information to it, to help stamp out fraud in the industry.
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