Bridging company warns brokers about rising fraud

Bridging company warns brokers about rising fraud




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Various statistics state that fraud is on the increase in the current economic climate, and now it seems that bridging loan companies can report the same findings. 

Lowry Capital, the Manchester based bridging finance firm, has said that its staff are seeing a rise in the number of fraudulent cases being handed in to them. In fact, in the last month alone they have received three.

 

“These fraudsters always approach bridgers; they must think that we don’t do as many background checks as long term lenders.” Jonathan Caplan from Lowry Capital says.

 

Worryingly, fraud is becoming more sophisticated. Mr Caplan explains that some people identify unencumbered property, using such tools as the Land Registry Property Search, before stealing the identity of the owner and opening a bank account in their name with fake documents. They then submit an attractive deal with a low LTV to a bridging company, using the property as security.

 

“Brokers need to be aware of this,” Mr Caplan went on to say, “we have seen three alleged frauds in the last month, which we’ve managed to successfully stop, but brokers should definitely be cautious.”

 

Mr Caplan warns other lenders that they must be careful to avoid being stung: “My main advice would be if it doesn’t feel right, then it’s not right. If it doesn’t make sense, be careful. Some of the deals presented look attractive and have low LTVs, but then you need to ask yourself the question: why does this person even need a bridging loan?”

 

The UK’s Fraud Prevention Service, CIFAS, has recorded a 16% growth in fraud during the last year, with the number of successful identity frauds up over 5%. The increase has been attributed to the credit crunch and subsequent downturn.

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