Not upheld: fraud prevention database reporting (Cifas marker) complaint against Paratus AMC Limited trading as Foundation Home Loans

Decision detail

Summary

Mrs G and Mr S complained that Foundation Home Loans unfairly reported them to Cifas fraud prevention database following a declined mortgage application. They claimed they were scammed by a purported broker (Mr F) who submitted an application without their knowledge or consent. Foundation's investigation revealed that bank statements submitted with the application had been materially altered to show a more favourable financial position than actually existed. The ombudsman found clear evidence of fraud in the application and determined it was reasonable for Foundation to suspect Mrs G and Mr S were party to the fraudulent submission, despite their claims of being scammed. The complaint was not upheld and the Cifas marker was not required to be removed.

The Ombudsman's reasoning

The ombudsman applied the Cifas standard requiring clear, relevant and rigorous evidence to support a reasonable suspicion that fraud has been committed or attempted. The ombudsman found that an application was submitted with materially altered bank statements misrepresenting the financial position. Although Mrs G and Mr S claimed they were scammed by Mr F and did not authorize the application, the ombudsman found it reasonable to suspect they were at least aware that an application relying on altered statements had been submitted on their behalf, particularly given the sophistication of the alterations and the need to address the bridging loan discrepancy. The evidence provided by Mrs G and Mr S (WhatsApp screenshots and statements) was not conclusive enough to dispel reasonable grounds for suspicion. Therefore, the standard for making a Cifas report remained met.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website