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Tough measures to tackle £77bn mortgage fraud

Published on 27 Jan 2010 under category: legal

The Financial Services Authority (FSA) has today set out tough new measures to tackle the £77 billion of mortgage fraud that was revealed last week.

New proposals will mean that mortgage advisors will become individually accountable to the FSA for their conduct.

Though it is not clear yet what criteria or procedure the organisation will adopt, advisors will have to prove that they are adequate for the 'Approved Persons' category.

Arrangers, compliance overseers and mortgage advisors that work with consumers will have their conduct scrutinised by the standards body.

All firms will be obligated to place a named individual - potentially either a director or senior manager - in charge of 'compliance' and 'compliance oversight'.

Michael Coogan, director-general of the Council of Mortgage Lenders, said that the move seemed too drastic.

"At first glance, the extension of the approved persons regime to both lenders and intermediaries appears heavy-handed, at least as far as lenders are concerned and may be a sledgehammer to crack a nut."

The first comprehensive account of annual fraud statistics by the National Fraud Authority this week found that mortgage fraud doubled last year.

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