Unwarranted CIFAS against my Name - Mortgage Application Fraud

[seelam_1]

Hi Forum,
I am new this forum (infact to any forum) but the need is such!!! So please accept my apologies if my below request is more in detail and boring and not in line with your expectations.

Issue in Detail: I have started a mortgage application with a leading UK Bank (which I have avoided since I went on the property ladder in 2010) in November 2015 after finalizing a property. However the property never materialised and I again started another mortgage application in March 2016 on another property. I have received an approve and then subsequently in 2 days it was withdrawn with a reason stating - 'Failed Head Office Review'. Without reading much into it, we approached another lender and got it approved in June 2016 and moved into the new property.

By chance, I stumbled across my credit file (I could see it as I work for the same Bank that declined my mortgage application) at my work place in october 2016. I noticed a CIFAS cat 4 - Application Fraud recorded against both applicants (includes my mrs) in march 2016. However the same CIFAS marker, I do not see on my credit report on any of the 4 credit agencies that i get from checkmyfile every month. I have done a bit of investigation on my own and contacted the fraud team that left the marker and eventually ended up losing my job (due to whistle blowing). I am not worried about losing my job (as a contractor I am aware that with CIFAS, I cannot work for a bank) however all my years of experience is with the financial services so that's a bit of a worry as of now.

Now I have done SAR requests to CIFAS, N HUNTER and the Bank that left the marker and received them. The Bank has send me a referral history section which has the following wording...
Copy of Accountants Certificates (unverified)
Third party response received not verified for both applicants. All 3 years figures at variance with 10% margin.
Declining and loading CIFAS for false income proof.
Will stop file accountants who produced certificate
Incident report submitted.

They have reported status for both of us as FRAUD, my accountant's firm was set the status as clearNI and my mortgage adviser status as suspect.

Now I operate through a limited company with both of us 50-50 shares. my Accountant has been doing my accounts for all 10 years since incorporation. My company accounting period is Nov to Oct and and I file Self assessments at end of each financial year. The figures quoted in the accounts certificate are genuine and as submitted to the HMRC and the bank has asked us authorization to contact HMRC. My accountant is scratching his head saying everything is correct and genuine and he does not understand the 10% variation bit.

I have appealed twice and failed to the Bank and now received the final letter. My accountant is cleared, my advisor is cleared and I got the marking and I did not even enter a single figure on any document. The accounts document was signed by the CA.

Now what are my options?
Apply to CIFAS first to investigate?
Then apply to OMBUDSMAN to investigate?
As I genuinely have not committed any fraud (at least knowingly), I am under the impression that either the bank totally got it wrong and if they are correct, then the accountant has not been doing a good job for the last 10 years. In either case, one of two will have to take the blame and compensate me...right? So I was thinking that i should hire a solicitor but whom should I go against? I am struggling to find a solicitor who can fight CIFAS and is aware of Accountancy. If you know anyone, please refer.

Other basic info required
What is the 3rd party here that the bank checked with and could not verify? could it be the HMRC and why would they have it different if at all?
Are the Banks supposed to disclose to us the 3rd party name from where they received the document (and may be send us a copy of the document), so that we can know if that was correct or if we have a chance to fight a case?
I have no need to defraud the bank and I could not digest that i had to leave my work place where I worked for the last 10 years (but the bank does not know that I work there anyway).
I have submitted my SA302s as well but still they used by 3 years accounts as well. Is that a practice?
I have used the same accounts information (without the need of a form) and the same SA302s and secured a mortgage with another lender.
I have used the same Mortgage advisor since 2010 and since then i have done 2 new mortgages and 2 remortgages without any issues with the same structure of accounting information.

I hope I have been clear enough to put forward my case. if you need any further information please ask.

Can someone please help me through this, as getting this marker off is my highest priority (my job still awaits whenever I return) and if the marker is genuine and is expected due to accountants error, then I will have no other options than to go after my CA as I have been his client for the last 10 years.

Appreciate your help.

[Never-In-Doubt]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

This sounds pretty messy. First, CIFAS will be recorded separately to your CRA - you've done a SAR. Good.

So, the accountant has *allegedly falsified your accounts most likely, in the banks mind, to allow mortgage based on affordability and it sounds like they're saying his figures are +10% what a third party has verified. Guessing this is publicly available through Webcheck Beta - google it and check your accounts (as reported) against your accountants supplied figured for the mortgage.

If they tally then consider the ombudsman. CIFAS won't remove it unless it's an error. As the bank are saying it's correct and issuing a final response, your only recourse is the ombudsman.

Check your accounts against the mortgage application figures (SAR will show what you supplied) and that'll help assess whether you have any argument. Then let us know; if they tally it's time to go to ombudsman.

Finally, which bank is it? If you can't say please PM me and let me know as it'll help.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Thank you friend.

more in PM.

how can I get hold of full accounts? CT600 was submitted by my accountant and i want to see what HMRC holds about my company and if it is the same as I have authorized.

Appreciate any help..

[Never-In-Doubt]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

You'd need to ask accountant or view online HMRC records using your government gateway login.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Thank you.

I will get those details from my accountant to view it myself online.
If I cannot get hold of it, could I call HMRC and ask to see what information they hold and can I reveal the reasons for asking this?

Sorry could not send any more PM messages as it says out of space.

[Never-In-Doubt]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

1. You can SAR HMRC; might be worth it -> https://www.gov.uk/guidance/hmrc-subject-access-request

2. If you call, sure just say something along the lines of "I just want to check what salary details were recorded in years X, Y & Z". Be vague (ish) - no need to say too much and get them defensive

3. Post a few more times to get more PM's (you're too new so only get 5 at moment) - and also go in and delete sent messages AND deleted messages as well as your inbox so they're all empty because until you hit the required post threshold, you're limited to 5 PM's. These increase when you post a few more times. Also, you get more with AAD+ Membership -> http://forums.all-about-debt.co.uk/aad-members.php OR email me (see my signature below).

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Just read through this post. Without going in to my own background I can hopefully clear a few things up for you.

Firstly accountants certificate, if the bank couldn't verify it, it means that whatever body your accountant has said they are a member of is either not recognised as one of the bodies the bank accepts or the body has no record of the accountant being a member.

With regards to accounts appearing to be falsified to achieve acceptance for a mortgage, seems unlikely that this is either the case or that if it was, would be detectable unless your accountant did something very silly and provided evidence that did not match what was submitted to hmrc.

However with that being said, sa302s show income from self employment, paye, or directors dividends, it does not show what a Ltd companies net profit is, that's a ct600, there is no sa302 for that, sa302s are generated from sa100s.

There appears to be some conflicting information here.

10% margin doesn't make much sense to me other than perhaps, the dividends declared on your self assessment would not have been possible based on the left over profits of the company (dividends are taken from profits, not an expense of the companies turnover).

Most banks these days are requesting Sa302s and tax overviews. If you wish to know what information was submitted to hmrc, registering on their website won't tell you anymore than the tax due, however if you know how tax is calculated it is quite easy to work out, what income was declared based on the amount of tax being due and when.
If you want to know exactly what information was submitted, you would need to request copies of your tax returns from hmrc, don't be suprised though if it takes them over 10 weeks to supply them.

My advice to you, if you haven't done so already is to seek a new accountant ASAP, it doesn't sound good at all that they failed with their certificate check, nothing wrong with not having a valid certificate to a reconised body(plenty of decent tax practitioners out there) it's the fact the check failed that worried me, you wouldn't provide details if you wasn't really a member.
And lastly. As the law stands you are responsible for your tax affairs and the information that is declared, not the accountant and as such you are liable. The accountant can and will argue that they submitted figures based on information provided and as you (should) have signed the declaration prior to submission, you (should) have been fully aware of the information being declared.

I should also stress though that accountants sometimes have very little information to work with and if someone hasnt kept strictly within guidelines with regards to how they operate the business and its bank accounts, along with missing information or records, an accountant has no choice but to make an educated guess as to what really took place. For example when dealing with a limited company the money is not yours until drawn, you would be surprised just how many directors think it's ok to take money however they feel without regard to consequences. If I can help you in any way feel free to pm me.

Don't bother wasting time asking the accountant for details to obtain hmrc login, they can't provide you it. Accountants have their our agent login and it's not to be given to any one. You need to register yourself.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

On a side note, the 3rd party may have been companies house or creditsafe? Just a guess

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Hi All,
Thank you all for your suggestions and support. I have now appealed to CIFAS and have received a final response and its a disappointment again!
The details they provided are as below. If you can make anything out of these lines, please suggest or advice my next steps..

"After a review of the case I am unable to recommend that the CIFAS data be removed. The reason for my decision is based on the following evidence from Santander.

On 21st March 2016 Santander received an application on both of your names via a broker for a Mortgage.To support your application, you each supplied an Accountant's Certificate in your names.

Santander has been unable to confirm the validity of these documents.

As the documents you supplied to support your application could not be verified, Santander acted correctly in recording the Cifas information."

Does this mean my accountant who signed the accounts certificate is not authorised or recognised?
Or if he is still authorised, he has not responded to any validity queries from the bank?

I understand they are saying the accounts certificate could be validated rather than the information on the certificate.

Appreciate your help.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

No what it means is whoever filled out the accounts certificate put your name down as the agent. Or whatever the information was that was placed on the certificate could not be backed up with evidence. Such as payslips or proof of income. Probably a genuine mistake, but one that could be rectified if you contact the accountant and explain?

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

No what it means is whoever filled out the accounts certificate put your name down as the agent. Or whatever the information was that was placed on the certificate could not be backed up with evidence. Such as payslips or proof of income. Probably a genuine mistake, but one that could be rectified if you contact the accountant and explain?

Thank you Friend
I have now got some more clarity after asking my accountant to provide the break up for each accounting year and self assessment in terms of salary and dividends. He has now come back saying that there was an error whilst considering dividends at the time of filing self assessments for 2014 (filled in 14K more as dividend) which was not considered in 2013 annual accounts. so the 2014 self assessment filing is incorrect and he wants to raise a correction note to HMRC to get it corrected by deducting the 14K. However I asked him to hold on until i confirm back.

Isn't it too late for this correction to be considered in any further appeals or challenges?

I also just now spoke to an ex-fraud manager in Santander who is still reviewing my case (paperwork) and his early analysis (a quick glance) suggests that the issue could be related to the total Salary quoted in the annual accounts (salary + dividends between nov to oct) is not matching the total salary quoted in the Self Assessment (salary + dividends + any other income 6th april to 5th april) and that is causing the 10% margin variation. He also recognises that the company accounting date is different to the Self Assessment date so could be a genuine oversight.

But now the problem is that if I have to go further to challenge or appeal, I will be unable to explain the difference in the 2013 company accounts dividends consideration against the 2014 self Assessment dividends considered.

What to do?

I am not sure how I can send you some documents via this service if you would like to review to understand what I am talking about (if still unclear).

Many thanks for hearing out.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

For now I understand what you have said so no need to supply anything just yet. However I have a few points to note.

You are correct about being out of time to file an amended self assessment hmrc give 12 months from submission to mend any errors. Any amendments after that date could raise penalties, however as the figure submitted was higher than it should have been they may overlook since since in theory you may have paid too much tax.

He can amend the tax return to show the correct figure, but what concerns me more is the admission from him that he overstated your dividends by 14k. It worries me because he should have that figure to hand regardless of company accounts.

I am also unsure why the person at the bank would note the difference in accounting periods, the two are not linked. Self assessment runs from 6th April to 5th April every year and is based on income tax, company accounts can run between any period and is based on corporation tax dates of 31st May to 1st April each year. So by definition they would be different. However you must include figures of salary and dividends between the dates for income tax purposes and so that argument is neither here nor there.

The accounts certificate should show gross income and net profit of the companies accounting period and dividends taken between 6th April and 5th April. It's my guess your accountant listed dividends taken for the company period by accident thus it would not match self assessment.

I do believe this can easily be fixed though. Make sure your accountant files a correction and provides you with an SA302 confirminh actual figures. But one thing I'm not so clear on is how the markers work in respect to whether they show actual activity or whether it's something that can be removed. By that I mean the figures didn't add up at the time and therefore is the market correct? Or is it something that can be removed based on an error caused by your accountant? Someone else will need to answer that question.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Thanks. You almost confirmed my fears.

You stated in your response - "The accounts certificate should show gross income and net profit of the companies accounting period and dividends taken between 6th April and 5th April. It's my guess your accountant listed dividends taken for the company period by accident thus it would not match self assessment."

My company accounting period is 1st Nov to 31st Oct and self assessment is from 6th April to 5th April.

The accountants certificate my account produced and signed has the company turn over, profit before tax, Profit after tax before dividend which are based on company accounting year. He also provided Applicant Salary and then dividends based on the company accounting period and not self assessment period.
Is this an error that the accountant made in filling in the company accounting period dividends where it should actually be self assessment period? How would the accountant know that the dividend should be of the self assessment period (6th april to 5th april) and not company accounting period or is it a general understanding that all accounts should be aware of this already?

Now I have spoken to my friend (Fraud manager) who came back with the following findings:
1. It was unfortunate that I was picked up. The reason why I was picked is because there is some kind of a trigger that triggered my broker or his firm and subsequently picked up my application.
2. Then they went ahead with the Accountants certificate verification using the income verification with HMRC. As part of the income verification, they would provide the figure stated in the Accountants certificate along with my NI number and HMRC would return the result as Verified or Unverified. If the response is Unverified, it means that the figure quoted for the tax year did not matched and could be well outside the allowed tolerance level of 10% margin. Hence that generic statement as 'third party response received not verified for both applications. All 3 years figures at variance with 10% margin.'

Now with point 2, it makes sense, because the figures quoted on the accountant's certificate will not match the SA302 figures. It is unclear if they key in the dividends or the Total salary whilst querying with HMRC.

The Accountants Certificate form does not indicate that the dividends and salary should be of the tax year. (at least thats what we always received from the broker to complete). Two pages per applicant.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Ok. Some banks or building societies have different layouts to their accountant certificate so I may be confusing yours with there's. However generally they ask for periods to which the info relates, and as i explained before info in self assessment is for a different period to company accounting periods, and so if they used that information to check against certificate. That is why it failed. Salary on paye plus dividends would all be shown for the period between 6th April and 5th April. Yes the accountant would know the figures for relevant periods, it's his job to know. And wouldn't be hard to work out if he didn't in all fairness.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Ok. Some banks or building societies have different layouts to their accountant certificate so I may be confusing yours with there's. However generally they ask for periods to which the info relates, and as i explained before info in self assessment is for a different period to company accounting periods, and so if they used that information to check against certificate. That is why it failed. Salary on paye plus dividends would all be shown for the period between 6th April and 5th April. Yes the accountant would know the figures for relevant periods, it's his job to know. And wouldn't be hard to work out if he didn't in all fairness.

No, what I meant is based on the form with the info required, how does the accountant know that he has to give certain information business related and salary and dividends for the financial year as the table on table does not clearly indicate that. I guess he completed form based on CT600 which has the dividends taken for that accounting year and salary as director's pay out instead of the financial year dividends (if that is what is expected on the form).
I have Private messaged you with a screen shot of the table of data requested. Please check and let me know.

Is it a case of a genuine mistake that he filled in all CT600 related information thinking is the accounting of the business they are asking rather than the individual? also SA302 has all the details which were also accompanied with the documentation, so why would they need an accountant's certificate?

Anyway, whats done is done. If you think that it is the financial year dviidends that needs to be go in that form and we made a genuine mistake, is it not just that I appeal to financial ombudsman confirming that we made a genuine mistake due to no guidance and provide all the CT600s and SA100s to confirm that all figures stated are accurate as submitted to HMRC and hence the mismatch whilst income verification?
Appreciate your support.