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Don’t risk your reputation and business by failing to do due diligence on your clients.
Our 2025 programme of the Get More webinar sessions continued in June with a fascinating talk on fraud from Aldermore’s head of direct and distribution support, Wayne Oldham.
He gave us key insights into the most common types of mortgage fraud alongside practical ways to identify red flags.
Wayne kicked off with data from CIFAS and UK Finance, including some worrying consumer attitudes to fraud:
• One in six adults admitted to exaggerating their earnings to secure a mortgage.
• 14% of respondents to a CIFAS survey didn’t think it was illegal to provide misleading information.
• £1.7bn was lost to fraud in 2024, but the industry prevented £1.45bn of unauthorised fraud in the same year.
Brokers play a huge part in helping us stop fraud as the first line of defence, interacting directly with clients and often spotting red flags early.
Aldermore’s underwriters act as the second line of defence, screening every application for inconsistencies between the client documentation and third-party reference agencies and the information submitted.
Shoring up the defence is our Financial Crime Operations team, which uses advanced tools and links to HMRC and banks to investigate cases escalated by the underwriters. They can dig a little deeper and decide whether to proceed or take further action.
Income fraud tops the list of mortgage fraud received by Aldermore, with borrowers inflating their earnings through doctored payslips or taking temporary second jobs with the intention of boosting their income to secure the mortgage.
Scheme abuse is also common, where borrowers use a buy to let mortgage for a property they intend to live in as their main residential home, to benefit from different affordability requirements.
Tax evasion is the biggest reason we raise ‘suspicious activity reports’, including non-declaration of rental income, cash-in-hand jobs, non-payment of tax or falsifying purchase prices to avoid stamp duty.
Hidden adverse credit is where applicants fail to disclose past addresses or names to hide credit problems.
Deposit fraud is less common: criminals use property purchases to launder money, using ‘ill-gotten gains’ as a deposit, with falsified bank statements to make it look legitimate.
Impersonation fraud involves using fake IDs to secure loans. Fraudsters set up false bank accounts in the person’s name and take loans to build up a credit history before applying for a mortgage.
Third-party fraud, committed by brokers, solicitors, or accountants, is rare, but we’ve had instances of accountants being paid to provide false statements and fake solicitors trying to get hold of deposit funds.
According to Wayne, mortgage fraudsters fall into two broad categories:
1. Professional offenders: these are unusual but dangerous organised criminals, committing fraud to clean dirty money.
2. Desperate clients: more common are borrowers who commit fraud to secure a property or remortgage. They often don’t view bumping up their income as a crime, but could face severe consequences, including a potential prison sentence.
For brokers, understanding your client’s motivations and sense-checking the application, particularly the income, is key to identifying potential fraud.
Wayne gave us an example of a recent ‘staged payment fraud’ which involved the borrower creating an unsustainable income trail. In this case, the borrower had two full-time jobs with similar salaries – one as a marketing manager and one as a social worker.
It transpired that the more recent ‘marketing role’ was for an Indian restaurant, which was actually owned by the applicant’s father. The social worker job was the real full-time job, but the income wasn’t sustainable to maintain the mortgage alone. Had the mortgage completed, we felt sure that the second ‘marketing job’ income would quickly disappear, so we declined the application.
Fake documents, including IDs and bank statements, are increasingly sophisticated and harder to spot.
To identify fake driving licences, Wayne highlighted some red flags:
• Colour photos: real licences have been black-and-white since 2007.
• Typeface: Genuine licences use specific typefaces with unique features, such as a faint dot in the middle of the number 0 and distinct letter shapes on several letters.
To identify fake bank statements, brokers should look out for:
• Incorrect typefaces or old logos.
• Spelling mistakes on the transactions.
• Misaligned pages – this is a good indicator that the page has been edited.
• Incorrect balances – when a fraudster amends one transaction, such as their income, they sometimes forget to change the total balance, so the numbers don’t add up.
• Salary credits on non-working days.
• Edited PDFs: check the ‘document properties’ for discrepancies in the creation and modification dates or signs of editing tools, such as a PDF unlocker, having been used: check the ‘PDF producer’ field for this.
Finally, Wayne touched on Aldermore’s review process, reassuring brokers that our decision to remove a firm or individual from a panel is always based on our evidence, not third-party concerns.
While the FCA shares information among lenders, Aldermore conducts its own investigations before taking action. Most removals result from poor controls and a lack of due diligence rather than complicity.
But sophisticated fakes are hard to spot and, if you get stung by a convincing fake, we know that it’s not a failure in your controls; it’s skill on the fraudster’s part.
Fraud prevention requires us to work together, and your BDM is always on hand to discuss concerns or review documentation.
By spotting and stopping fraud, you can shield your clients from overstretching themselves or being taken advantage of, as well as protecting your own business and reputation.