Quality | 2009.11.14
Fake payslips in mortgage fraud racket
Observer investigation takes just seconds to buy documents that can be used in home loans fraud
All it took was a few clicks of the mouse and a payment of £35 for an Observer reporter to obtain a counterfeit payslip over the internet which would allow her to commit mortgage fraud worth hundreds of thousands of pounds.
Dozens of websites are selling the high-quality documents which are being used as false "proof" of salary in applications to banks and helping to add to the tens of millions of pounds of mortgage fraud within the system.
The increasing use of these sites comes as mortgage lenders are being asked by the Financial Services Authority to become more reliant on documentation such as payslips. Police plan to launch a crackdown on the websites.
Obtaining the payslips takes just a few minutes. An Observer reporter entered "fake payslips" into a Google search, half a dozen possible sites were offered, and the top one was chosen. The site said: "Can\'t get a mortgage loan? Need Proof of Income? … We can supply you with genuine Inland Revenue [ sic ] approved payslips for Proof of Income, Guaranteed Next Day Delivery."
It offered a range of designs and asked the reporter to enter details including a company name, a notional salary, a national insurance number and how many payslips were needed. The website calculated the taxable pay and national insurance and even offered to add further details such as pension deductions and bonus payments for an additional £4.95 before offering a range of payment options. Three professional, authentic-looking payslips arrived two days later.
One businessman who sells fake payslips on the internet defended his trade. Dominic Green, general manager of one of the websites, Replicadoc.co.uk, said that he is offering a legitimate service for clients who wish to use them for fun, not to commit fraud. "The terms clearly state that work is produced for novelty purposes. What the client does with the work is their business," he said.
"It is easy to assume that all clients who come through the website use the documents in relation to fraud. However, there are lots of cases where clients are self-employed and don\'t issue themselves payslips and need quality replacements or where clients have online banking accounts and they don\'t receive paper copies of their bank accounts."
Anyone using a fake payslip to get a mortgage would be committing fraud by false representation, punishable by 10 years in prison; or posession of an article for use in the course of fraud, which can carry a five-year sentence.
The threat of imprisonment has not proved to be a deterrent, according to one former mortgage broker who said that he has suggested to customers that they should use fake wage slips if they lack proof of income. "No one came back to them about it from the banks. It goes on a lot, especially when someone does not know how to account for their cash," he said.
The Metropolitan Police is planning a crackdown on the websites. Once obtained, false documents such as payslips can be used for a host of crimes including immigration rackets, benefit fraud and applications for mortgages.
Detective Chief Inspector Nick Downing from the Met\'s economic and specialist crime command said that 30,000 false identities had been discovered after raids on ID "factories" across the capital. Now, depending on the outcome of a test case, the Met is planning to clamp down on the people behind the websites. He said: "We have disrupted over 30 of the more traditional ID factories in residential premises over the last three years. We hope that after an upcoming court case we can replicate this activity in the \'e-arena\', as we call it.
"Often the servers are based abroad which means that we can\'t use the traditional policing methods we have used on the payslip factories, so we are having to tailor our policing accordingly," he said.
Police are also working closely with manufacturers and retailers of high-class laser printers after discovering they could be used to produce fakes. A £750 printer was withdrawn from sale at PC World after detectives revealed it could even produce replicas of the proposed new ID card and EU driving licences.
The cost of equipment needed to set up ID factories is falling, making them easier to establish. Scotland Yard, manufacturers and shops are working on a scheme named Project Genesius to keep such printers out of the hands of criminals.
Lenders admit the forgeries are difficult to spot and are concerned that their use could become more prevalent under new FSA regulations which require more physical documentation. Sue Anderson, from the Council of Mortgage Lenders, said that such rules introduced under the mortgage market review released last month will result in greater use of fake payslips.
For more information, please visit
http://www.guardian.co.uk/uk/2009/nov/15/id-theft-internet-fraud-mortgages
