First FSA fine of 2010 goes to mortgage firm for fraud failings

First FSA fine of 2010 goes to mortgage firm for fraud failings


The FSA has fined a Northern Ireland mortgage intermediary Case Funding Centre (CFC) £35,000 for failures which led to at least 16 fraudulent mortgage applications being submitted to lenders. 

James Ian Shanks, a former partner and mortgage adviser at CFC, has been banned for recklessly submitting false information to lenders.

During its investigation the FSA found that CFC did not have adequate systems and controls in place to counter the risk of customers and staff submitting mortgage applications based on false income and employment information. Furthermore, advisers did little more than superficial ‘sense checks’ on mortgage applicants’ income and employment details.

These failings, combined with CFC’s reportedly weak recruitment process, led the regulator to conclude that the firm had exposed itself to the risk of being used to facilitate financial crime.

Mr Shanks was also shown to have submitted mortgage applications from CFC’s advisers containing income information that he failed to verify against the firm’s records, despite being aware that such a check was possible.

Margaret Cole, director of the FSA’s enforcement and financial crime division, said: “We expect all authorised firms, including lenders, to take the necessary steps to stop their businesses from being used to commit crime. We also expect high standards from individuals who are approved by the FSA to perform significant influence functions.”

As CFC and Mr Shanks co-operated fully with the FSA during the investigation and agreed to settle at an early stage, a 30% discount was applied to the proposed penalty of £50,000 for the firm.

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