Not upheld: fraud prevention database reporting; altered documentation in loan application complaint against Iwoca Ltd

Decision detail

Summary

M, a limited company, complained that Iwoca Ltd reported it and its director Mr M to Cifas fraud prevention database after declining a business loan application. Iwoca had identified an altered bank statement submitted in support of the application and reported it as suspected fraud. Mr M claimed the altered document was an internal working document accidentally uploaded due to administrative error with no intent to deceive. The ombudsman found that Iwoca had clear evidence of an altered statement through its underwriting checks, and that there were reasonable grounds for suspicion of intent to deceive. The ombudsman upheld Iwoca's right to report to Cifas without prior notification and did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman applied Cifas principles requiring clear, relevant and rigorous evidence to support reasonable suspicion of fraud. The ombudsman found that an altered bank statement was undisputedly submitted and that Iwoca's checks verified transactions were not genuine. While accepting Mr M's explanation about administrative error, the ombudsman found it difficult to understand why a genuine bank statement would be altered to amend past transactions for forecasting purposes. The ombudsman concluded there were reasonable grounds for suspicion that M intended Iwoca to rely on the altered statement, meeting the standard for Cifas reporting. The ombudsman also found no obligation on Iwoca to notify the applicant before reporting.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website