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Lloyds axes 900 brokers from its panel

Lloyds Banking Group has struck 900 mortgage brokers off its panel over the last three years after uncovering suspected fraudulent practices.

This week’s Money Marketing also reveals that around 300 brokers have been removed from Lloyds’ panel over the last year.

Practices such as over inflating income and fraudulent applications have led to brokers being suspended for interim periods of three, six or 12 months. In some cases Lloyds has stopped working with brokers on a permanent basis.

Money Marketing understands that some cases have come to light during the application process, while others have been flagged as part of Lloyds’ post-sale reviews.

Lloyds sales director of mortgages Mike Jones says the bank does not take the decision to remove brokers from its panel lightly.

He says: “When we understand there are issues with business submitted, there is a robust process in place where we contact intermediaries to discuss this long before we take action to remove them. However, it is also right that where fraud is suspected, we take immediate action.”

Brokers can appeal the decision to remove them from the panel, but Lloyds says in the vast majority of cases the original decision was the right one.

Association of Mortgage Intermediaries director Robert Sinclair says: “We have been encouraging Lloyds and other institutions to operate a more open and transparent appeals process over the reasons for any decision they make with both the individual concerned and their firm. Some progress has been made on this.”


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There are 24 comments at the moment, we would love to hear your opinion too.

  1. I wonder how many of them were their own advisers.

    I’ve had cases refused by C&G and then the client goes via the branch and it is approved.

  2. I’d like to see how many members of Lloyds sales staff would be struck off if they checked completed cases they’ve done in branch.
    Lol, it would be a massacre, they would have no staff left.

  3. I find the tenet of the above quite disturbing. Not only is the number of brokers supposedly committing fraud quite large, but the intination is that once they’ve had their bottoms smacked and suspended for a short while, they can carry on in business. This is precisely the reason why the FSA are on the hunt for brokers and IFA’s. Lloyds should immediately report the suspected fraudulent activity to the police and the FSA and the individuals should never work in the industry again, if the fraud is proven.

  4. Compliance Manager 2nd February 2011 at 9:53 am

    I have to disagree with the following comment:

    “When we understand there are issues with business submitted, there is a robust process in place where we contact intermediaries to discuss this long before we take action to remove them.”

    I work in the compliance department of a major network and have had two cases where Lloyds removed advisers from their panel with no warning whatsoever.

    In addition, Lloyds flatly refuse to provide information to us, despite being the firm that has regulatory responsibility for the business. This serously hampers our investigations and massively increases our costs in resolving difficulties.

    We will terminate any adviser who can be proven to have acted fraudulently but Lloyds do nothing to assist us in this process.

    In the most recent case, I had to involve the FSA in order to obtain information and, even then, Lloyds would not state clearly and unequivocally what problems applied to which cases.

    If they’re serious about reducing risk to customers, Lloyds shoud work much more closely with those who can assist.

  5. I have had two cases where income was insufficient to support the mortgage according to the lenders calculator, one of which was very recent. Un-surprisingly both completed their mortgage in the lenders branch with no problems.

  6. if Lloyds are not reporting this fraud to police and FSA they are also guilty The problems that many banks and insurance companies have had is they dont like the press so they either sack them or wont deal with them the problem is these people just move on to another lender. another issue is why do some lenders not check income when app is submitted and then check later guess what its too late then

  7. I have to agree with Compliance Manager. As far as open dialogue is concerned absolutely no progress has been made.

    All this article highlights is how far Mike Jones is removed from the reality – there is absolutely NO process in place to contact us before a removal happens.

    We have never had any temporary suspensions only permament removals and for reasons such as ‘General Quality of Business’ – with no valuable information provided to help us to establish if the adviser is still fit and proper.

    We too have reported this to FSA and challenged the LBG Quality Assurance Team (the issue really lies with ‘HBOS’ by the way’) and I have evidence that I will now be presenting to Mike Jones that directly contradicts his statements above.

    Really pleased this is now out in the open and hope we can start to have an open dialogue before any decisions are taken.

    Oh, and don’t think that 900 brokers removed means they were all up to no good – some where granted, but this is about LBGs bottom line and the risks it has taken on through HBOS.

  8. Most of the |High Street Banks have a high staff turnover of Mortage Advisers. I am sure that this is in part due to their disciplinary actions or pending disciplinary actions against Mortgage Advisers for “engineering” cases through the system.

    I personally know of several Bank advisers who have left their position due to this, so let’s not kid ourselves that the Banks are only going after the Intermediary communitity.

    And with regards to Lloyds quote “However, it is also right that where fraud is suspected, we take immediate action.” – I am of the opinion that one is innocent until proven guilty, and Banks sometimes need to do more before refusing to accept more business from an intermediary – I wholehartedly agree with the Compliance Manager’s view here.

    “Compliance Manager”‘s comment, the quote that he Network

  9. So lloyds want to cut brokers out of the equation
    I would advise brokers not to use halifax as any mistake may mean that they may have to leave the industry,be very careful
    Also Lloyds group want us to sell lots of GI to get our own back lets start to take this business away from them
    Lloyds will then start to lose market share and this will force them to start encouraging brokers business

  10. where to we find a list of those who are banned

  11. This a little silly. C&G were long my favourite lender, with intelligent underwriting by local experienced managers. The BDMs knew which brokers were bent and avoided them like the pox. Unfortunately the relentless ratchetting of targets and the introduction of ” caseflow ” caused an inevitable deterioration of standards and the good people left.

    If Lloyds is cleaning up its Augean stables it should remember that they allowed the s**t to accumulate.

  12. Anna – you can’t get a list

  13. A few years back a client approached me for a loan of £382,000 on a £500,000 purchase. Her provable income was £6,000 net.

    I was more than surprised when the local Lloyds arranged, via C&G, a loan for this amount.

    It transpired that the branch manager had placed an income of £50,000 for the client and her unemployed husband.

    Like the mis-advising of investment products the branch targets have to be met somehow, right?

  14. Mr Lakey, on the facts you present I would have suspected tax fraud – did you? And, if so, did you report it?

  15. I am sure , 100% sure, Lloy will be a very good Bank again very soon, less 1 year, although it was difficult time last year.

  16. I think Lloyds need to look at their Financial Advisers rather than Mortgage Advisers within the bank. I worked in the Dundee branch briefly as a Financial Adviser and Mr Compliance manager previously, would have a ball with the way some Advisers conduct business inside the bank.

  17. What robust, fair, process!? 2nd February 2011 at 3:31 pm

    Let’s be honest, it is clear that LBG do not have an open, honest, and transparent process for the removal of intermediaries from its panel.
    TCF!? What about TBF!
    As per Anonymous colleague of 10.22am – I would wholeheartedly agree that “one is innocent until proven guilty”.!
    LBG refuse to divulge any information in order to assist with our investigations, and conveniently use their ‘get-out’ clause on their online agreement to ‘chose who they wish to accept business from’ and ‘can terminate you whenever they wish without reason’ which is appalling.
    The FSA is also fully aware of LBG’s severance crusade and see this as LBG’s unfair way of getting rid of intermediary business out of their back-door!
    Let’s go back only a few years – lenders were fully responsible for creating their ‘innovative products’ in order to compete for market share, with relaxed underwriting and criteria, and approval of each mortgage was the responsibility of the lenders own staff. If an adviser is proven guilty (following an open, honest and transparent review process), then what about their underwriters who were responsible for allowing the case(s) to go through in the first place.!!? They’ve probably been retrained or still doing the same job (however without bonuses).
    It’s too easy to blame the adviser and sever their relationship without a fair trial and a genuine and transparent appeal process!

  18. yes lets all make sure that we never use Halifax again and lets start to take back the GI products that the Halifax have sold to our clients

  19. Wide spread mortgage fraud 2nd February 2011 at 7:58 pm

    We all know that mass mortgage fraud was committed by brokers and bank staff. This was one of the main causes of the housing bubble. In 2003 BBC money program showed 9 out 10 brokers in west London told customers to inflate their salaries for mortgages. This mortgage fraud still continues to happen and is widespread.

    Let’s start throwing corrupt brokers in prison and let’s support the fsa MMR rules.

  20. Sandra McWhirter 2nd February 2011 at 9:03 pm

    To anonymous 3.31
    The lenders only responded to the market conditions with their ‘innovative products’ ie brokers were asking for it…in fact demanding it! How many people have been on here and are still looking for self certs etc!!
    It is mainly down to underwriters that many of these frauds have been caught! How is it the lenders fault if the broker/customer lies on applications..which after all are legally binding documents??
    If a case is found to be fraud then yes the broker is investigated (not initially struck off) and if further cases are found to be fraudulant then yes why not strike them off. After all it is them that are giving the bad name to all brokers! And lenders can’t tell you why you are struck off as this would be seen as ‘tipping off’.

  21. This whole navel gazing exercise is ridiculous.

    We all know that the banks weren’t bothered at all about income – as long as you had some equity in the property.

    Self-Cert basically meant write down the income you would need to earn to buy the property that you want to buy!

    So why are we all surprised when this comes out of the woodwork? Certainly the Banks should not be, because they were actively encouraging lending – because if their bank wouldn’t do it then someone else would.

    Net result? Over-inflated property values, negative equity for a significant percentage of the population – and a larger percentage hoping against all hope that interest rates won’t rise too much in the near future.

    To coin a phrase – There may be trouble ahead!

  22. I don’t know about LBG banning brokers but as a broker with a conscience I have refused to sell their products since Feb 2007. I can always justify why not to use them. Poor service is one good reason. They simply are not as good as they think they are. They do not deserve our support.

  23. I think that a lot of brokers have decided not to use them anyway. There service levels are questionable and their rates are not very competitive. For them to respond by culling brokers is beyond belief. It is on a par with the rape of Nanking

  24. I am interested by the number of people reporting double standards between the criteria we have as brokers and what happens in branch. I recently tried to get 90% LTV mortgage for a client, called HSBC and they confirmed he was totally outside their criteria for several reasons. Client then went to branch and got mortgage! 5 * income and he could not prove it to what they requested. Would love to know what goes on in branch sometimes!

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