"There is no appeal in that case, they are cut off from the lender, and importantly, their client can no longer access their products."
But the pandemic has also opened a window of opportunity for those looking to embellish their pay, hide debts, or even conceal their identity, which is a big issue for brokers even if they pass initial checks.
If a broker makes an application to a lender in good faith which later turns out to be fraudulent the lender may be understanding initially. However, if this continues and another client is passed on who is claiming to earn more than they actually make, lenders will soon run out of patience.
In fact, it is not uncommon for lenders to blacklist brokers who have put forward fraudulent clients repeatedly. The broker may well have done this in all innocence, but from the lender’s perspective, that does not matter. Because if a lender is having to waste time on clients who turn out to be bogus, or fraudulent, they will question whether the broker themselves is doing enough due diligence.
In most cases, it is hopefully naivety on behalf of the broker, rather than a deliberate attempt to deceive. However, the lender is within their rights to make a judgement call based on too many bad cases, and the broker can find themselves blacklisted. There is no appeal in that case, they are cut off from the lender, and importantly, their client can no longer access their products. If this happens to be one of the bigger lenders, this can be catastrophic for the broker.
Do your due diligence
So, to avoid being blacklisted, brokers need to ensure they are doing their due diligence. This starts with establishing who the client is through the Know Your Customer (KYC) process.
Knowing who your customer is has become more difficult through traditional ID verification. Forgeries have reached such a level of sophistication that assessing a physical passport or ID is difficult for even an expert. Therefore, the only way to accurately assess whether a person is who they say they are, is by using electronic verification.
The best and most efficient way to do this is through an automated anti-money laundering solution. By inputting just a few details – name, date of birth and address, the system will confirm a person is legitimate in just two-seconds, and also screen them against sanctions and PEP (Politically Exposed Persons) lists.
The latest technology can combine credit reference data, biometric facial recognition, and digital fraud checks. At SmartSearch we incorporate CRA (credit reference agency) data, electoral roll data and other reliable public data sources to establish identity. By triple checking these different sources of information, a unique ‘composite digital identity’ is produced that is virtually impossible to fake. All this can be done online, with no need for in-person meetings, face coverings or hard copies of documents.
This automated approach is quicker, more convenient and more accurate, and importantly, will stop a broker from being blacklisted by a lender. Brokers can get set up with an automated anti-money laundering system and this will ensure they can quickly and efficiently vet potential – and existing – clients, and give lenders confidence they can trust that you are doing your due diligence.
