The new home loan scam
What should you do if you can’t afford the house of your dreams? Simple – downsize or start saving. But some homebuyers have sought out an easier alternative, faking their finances to make it seem that they are earning much more than they are.
A plethora of websites produce “duplicate” bank statements, payslips, utility bills and P60s at the click of a mouse. Some claim that these are legitimate services for people who have lost their P60.
But the sites visited by Times Money made no attempt to verify any of the information we supplied about wages or income. This makes it easy for people who want to borrow more than they can afford to fake their details. Alternatively, they can use the false information to claim they are earning less than they actually are, cutting their tax bill or child maintenance payments.
The documents are convincing. The P60s, the statements issued by employers at the end of the tax year that state how much a worker has earned, are printed on the same stationery as that used by employers. And the bank statements are full of fictitious “everyday” withdrawals and payments, such as the monthly subscription for Friends Reunited and groceries at Tesco. A recent report from the Institute of Payroll Professionals (IPPR) says that the number of websites offering these documents is increasing.
Maurice Cheng, of the IPPR, says: “What amuses me is that the P60s are called 100 per cent genuine. The paper may be genuine, but nothing else is. There is no legitimate reason for them. If you lose your P60, you simply ask your employer for another. The most it costs is about £12.”
A Home Office spokesman says that the Government is concerned about the practice: “Individuals producing or selling such documents are liable to investigation and prosecution by law enforcement agencies.”
But he says that as many of the sites are based overseas, focusing action against them may not be “the most effective way” of protecting UK institutions targeted by the false documents.
Despite the difficulties, the Metropolitan Police is determined to tackle the sites. In a statement, it says that it is taking “a multi-pronged approach. “We are seeking to close down any websites providing this service.”
However, the websites contacted by The Times say that they are not acting illegally. A spokesman from replicadoc.co.uk says: “As you can see from our terms and conditions, we provide documents for novelty purposes. This means that the client has agreed, before they proceed, that the paperwork they are ordering should not be used for criminal activity, or for processing applications for financial gain.” While he acknowledges there is a “fine line between the legalities and morality of our services”, he insists that offering these documents “does not make us liable for prosecution”.
But consumers who use the documents to falsify applications for loans will certainly find themselves on the wrong side of the law. Tony Shaw, QC, a criminal lawyer, says: “It is fraud. Even if you don’t go to prison, you’ll have enormous credit problems. You’re misleading the mortgage company even if you believe you can meet the repayments, because they are making the advance with a false impression of the risk.”
On top of the risk of prison, borrowers who take out a bigger mortgage than they can afford could lose their home if they can’t keep up with the repayments.
Many mortgage lenders are now on the look out for fake documents. The Building Societies Association (BSA) says that their use is rife. Chris Lawrenson, head of legal services at the association, says people could be inflating their salaries to get a mortgage “or simply could be fraudsters applying for a bogus mortgage in a fake name”.
He says the fake documents can be quite convincing: “The bank statements, on the face of it, look right. But if a lender receives several statements from separate customers with all the same credits and debits, it is an impossible coincidence. Then the alarms will ring. But alone, each bank statement looks plausible.”
A spokesman for Halifax, the biggest lender in the UK, says: “We have undoubtedly seen fake documents presented to us.” But he says that lenders have a lot of armour against such ploys. “We have a number of checks behind the scenes, such as credit scoring and reasonability tests, such as checking a person’s income against their profession.”
‘The whole process has taken three hours and £120, not bad for a £37,000 pay rise’
My task is to buy fake documents that could help me to “prove” a salary of £65,000, more than double my actual pay and the earnings I would need to secure a £220,000 mortgage, writes Mark Bridge. It is Friday morning and I “need” the documents the next day.
I start with a Google search for “P60”, and immediately find a number of companies that will print off the document – to my specifications – on “Revenue-approved” stationery.
I go for the first hit,
www.payslipsp60.co.uk and select a basic, inkjet printout at £35, plus same-day e-mail preview, £4.95, and next-day delivery, £8.75. I fill in a simple form, entering national insurance number, tax code and tax office, employer’s name and address, the start date of my employment and my – alleged – salary. Then I pay by card. The website’s blurb assures me that “information on each of our client [sic] is deleted the next day”.
Just over two hours later, the firm e-mails me an image of the fake document I will receive. I see that I have slipped up. Because I entered the true start date of my employment at The Times last September, my “P60” lists my “total pay for year” at just £37,916. I call the company and tell them that I started in September 2005. Could they please amend the certificate to reflect my actual earnings?
After a tense few moments on hold to Lionel Richie’s Say You, Say Me, I am told that, yes, my P60 will now be changed to show the full £65,000.
I move on to a second website. For £79.99, including next-day delivery, Dominic at
www.replicadoc.co.uk will supply me with “Package 1”, a false bank statement, utility bill and payslip. I complete the relevant forms, for speed’s sake opting for a Barclays bank statement with “standard” transactions.
The form-filling – via a link to a site called fakealibi.co.uk – is straightforward, but payment is not. Replica Docs, it emerges, does not accept payments by credit or debit card. “Most clients,” I read, “pay by cash/bacs into our account, as this enables discretion.”
To ensure next-day delivery, I must make a cash payment to a Nationwide bank account. A 15-minute walk later, and £80 poorer, my second transaction has been made. It has taken just three hours and £120, not bad for a £37,000 pay rise.
Next morning, I receive two packages by special delivery. Both contain documents that I would mistake for the real thing.
Source: timesonline.co.uk
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