FSA fines Northern Irish mortgage firm for fraud

The FSA has fined County Down mortgage intermediary Case Funding Centre (CFC) £35,000 for failures which led to at least 16 fraudulent mortgage applications being submitted to lenders.

James Ian Shanks, a former partner and mortgage adviser at CFC, has been banned for recklessly submitting false information to lenders.

The FSA found CFC failed to properly avoid the risk of customers and staff submitting mortgage applications using false income and employment information.

Advisers did little more than superficial ‘sense checks' on mortgage applicants' income and employment details, it found.

Combined with CFC's historically weak recruitment process, these failings put the firm at risk of allowing financial crime, the FSA investigation concluded.

In addition, Shanks was shown to have submitted mortgage applications from CFC's advisers containing income information without checking it against the firm's records, despite being aware such a check was possible.

Margaret Cole, director of the FSA's enforcement and financial crime division, says: "We expect all authorised firms, including lenders, to take the necessary steps to stop their businesses from being used to commit crime.

"We also expect high standards from individuals who are approved by the FSA to perform significant influence functions.

"Both Case Funding Centre and Shanks fell short of the standards we expect and they are being punished for their failings. We will continue to take action against any firm or individual who present a risk to our objectives of reducing financial crime and maintaining market confidence."

CFC and Shanks co-operated fully with the FSA during the investigation and agreed to settle at an early stage, leading to a 30% discount on the firm's initial penalty of £50,000.