The FSA has published a speech by Philip Robinson (Financial Crime & Intelligence Division Director, FSA) entitled Working together to tackle mortgage fraud. In his speech Mr Robinson discusses mortgage fraud and the six financial crime outcomes which are:
- The FSA is satisfied that persons of questionable integrity do not manage, own or control firms operating in the UK financial sector. Mr Robinson states that this is the FSA’s “gatekeeper function” and that lenders believe this role to be crucial. The first line of defence in assessing whether, say, a broker is reliable is to check whether they are on the FSA’s Register. However, this is the start, not the end, of the due diligence process. The FSA needs information so that it can keep problem firms out of the market and the Information From Lenders project has been helpful in providing information. The FSA is looking for more lenders to join this project so that it can improve its intelligence on problem firms.
- Firms in the UK financial sector act proportionately to prevent financial crime - fewer commit financial crime themselves and firms manage the risk of being used by others to do so with appropriate skill and care. Mr Robinson states that this is no more than a restatement of firms’ general systems and controls responsibilities which puts the job of assessing risk and responding to it in the hands of senior management.
- The international and UK financial crime policy frameworks are more risk-based and proportionate, and the FSA delivers what is required of it within those frameworks. Mr Robinson states that the FSA is not operating a zero-failure regime because lenders are the primary victims.
- Consumers are better equipped to protect themselves from financial crime. Here Mr Robinson states that honest consumers are better protected when they know how not to get caught out by fraud and are helped to do so by the firms in whom they have to place their trust and money. Consumer protection also means protecting consumers from themselves by showing them that if they perpetrate fraud they should fear the consequences.
- The FSA’s financial crime risk mitigation is increasingly effective, economic and efficient. Here Mr Robinson states that the FSA is currently working with internal and external colleagues to create its programme of action. However, the FSA needs to ensure that its programme is proportionate to the risks and in order to do this it needs lenders to provide it with information.
- The FSA co-operates effectively with the right partners to achieve these outcomes. Mr Robinson states this is the “linchpin” of what the FSA does. The FSA’s objective is that firms should not be used for the purposes of financial crime and if it can help others so that their work achieves this aim then so be it.
View FSA speech - Working together to tackle mortgage fraud, 13 February 2008