Scambusters ready to tackle gangs cashing in on mortgage fraud

Published on Thursday 26 August 2010 14:25

A NEW team of fraud investigators is being trained to tackle the emerging threat of mortgage scams, identity theft and online crime.

The Scottish Police College has developed a training course that will teach people to deal with the most sophisticated types of criminal activity.

The former fraud courses have been revamped and their capacity doubled, with additional spaces made available for people working in banks and other financial institutions.

Levels of mortgage fraud rose sharply when the housing market was at its peak and banks were keen to lend. In 2008, it was estimated mortgage fraud was worth 1 billion a year.

That led to organisations, such as the Scottish Crime and Drugs Enforcement Agency, prioritising it and developing this new course to help officers track and apprehend offenders.

Detective Superintendent Rab McLaren, head of crime management division at the Scottish Policing College, said: "We carried out consultations with the private sector and financial institutions like the Royal Bank of Scotland, Halifax and Standard Life, as well as the City of London and the police academy in the Netherlands. We wanted to bring together experts to facilitate networks between investigators.

"Mortgage fraud has become quite a problem. This course is about giving investigators the tools and the ability to have access to information and databases to track individuals."

Some mortgage frauds are as simple as one criminal lending money from a bank to buy a property off another, and then disappearing. Others are highly complicated and involve a single property changing hands several times. In most cases the victims are the banks, but there have been cases in England of investors in the buy-to-let market being conned out of money.

Some criminal organisations will have mortgage fraud as their main activity, however, crime gangs involved in drugs and other offences also use it to launder their dirty money.

This is of particular interest to the Scottish Crime and Drugs Enforcement Agency, which is keen to lock up senior members of crime gangs and strip them of the proceeds of their illegal activities.

Alex McLaren, director of BTG Forensic, a forensic accountancy firm based in Glasgow, said: "The biggest problem with mortgage fraud is the fact that serious and organised crime proceeds are almost always filtered through the property markets."

Mr McLaren warned: "In America's subprime markets, and buying properties at 30 or 40 per cent of what people paid for them on the agreement, they will be rented back. People go for it because they're desperate, but once they've signed up, they find that three months on the property is being sold from under them.

"I hope that if people are going through the college and being training to detect mortgage fraud they will be prepared for these things before they hit."

Don't let yourself be hustled

1. MORTGAGE fraud is a just one of the many emerging and complicated scams which trainees at the Scottish Policing College will learn to detect.

2. ATM fraud remains a popular low-level scam which can be carried out by petty criminals, as well as more sophisticated ones. A typical tactic is inserting glue into the slot, so when a card is put inside it becomes stuck. Once the victim has given up and left without the card, the criminal extracts it, often with a crowbar, and uses it in another machine.

3. Identity theft is becoming increasingly common and, although the threat is well known, the growing amount of personal information stored online is making it easier for criminals to hack into accounts. Identity theft can be a starting point for many different types of fraud, involving mortgages, credit cards or illegal passports and the first the victim knows about it is when they are picking up the bill.

4. Credit card fraud is increasing in a world where so much banking, business and consumer activity is done online. In most cases, people fear opening up a statement to find their account has been hacked and large amounts of money has been cleared out. However, in most cases one account is too small a prize for the criminals, who want the cards to act as a key to the accounts of company holding hundreds or even thousands of credit cards.

5. Long Firm Fraud is becoming increasingly prevalent. It involves someone with a good credit rating - either their own or from a stolen identity - being used to borrow money to set up a business. The money is used to buy stock and the business may be open for a few months before the owner disappears with all the stock to sell illegally.