Unwarranted CIFAS against my Name - Mortgage Application Fraud

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

If check my pm and get back to you. But just to note. Dividends taken from what I recall are not shown on the ct600. They don't form part of the statutory accounts. It's only shown on an sa 100 and for the period I referred to earlier. In regards to paye this would be shown on ct600 and sa 100 however they would show different amounts due to different periods again.
I'll check your pm and get back to you.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Hi SxGuy,

Took a while to review and assess the situation. I think now I have some clarity on how things have been dealt with and the assumptions in the documentation and lapses on all parties involved. I will try to brief below as much as I can. Please could you review and provide your option?

Firstly Santander is the only lender that has ever asked for an accountant's certificate (I mean with all the lenders that I have dealt until so far since 2009). All other lenders always relied on the application form the advisor would complete and send along with my SA302s, bank statements etc. The process with Santander is - After the AIP, as part of the FMA, the advisor would send me an accountant's certificate which I need to get it completed by my accountant and also provide the most recent SA302s along with other mandatory documents back to my advisor who would then complete the full application and send it off. Since i know my advisor since 2009 as part of my first mortgage application, he has all my financial details in his record and would only want newer SA302s and the accountant certificate along with latest bank statements. We use all these people to guide us through the process as we are not sure how to proceed. So far so good.

Now for where things have gone wrong, I will try to summarise each actions.

Role of Accountant:
He receives the accountant's certificate and he completes and sends it back to me. He filled in the form with figures based on the annual accounts we submit to HMRC. The form comprises of the following fields for each accounting year.
Dates of financial year end
Last completed year: 30/10/2013, 2014, 2015 (3 rows)
Annual Turnover: figures form CT600 (field 1 from company tax calculation, page 2 of CT600)
Profit on Activities before tax: figures from CT600 (field 37 from company tax calculation, page 2 of CT600)
Profit (after tax and before dividend distribution): figures from CT600 (field 37 minus field 70 from company tax calculation, page 3 of CT600)
Applicant's Salary as director (A):it is the directors salary as declared in full accounts draft version that I have same as in Abbreviated accounts draft
Applicant's Net dividend distribution (B): This field he worked out as profit after tax divided by two as we both are 50% shareholder each (my spouse and I)
Applicant's total Income (A+B only): worked out based on the above two fields A + B.

Now as I can see, Applicant's Salary (though is there in abbreviated and full accounts) is not mentioned in the CT600 form and also the net dividend for each is not featured in either of the CT600 or full or abbreviated accounts, instead has been worked out based on the field (profits after tax), did the account do an error in particular to these two fields? Well salary field is the same for each financial year even if you take it as accounting year or self assessment year, so I guess the only other field that is of concern is the dividends field.
My accounts version is that he has provided all the figures based on the accounting year end and the dividends he just halved it between us two which will tally for the accounting year profits.

Now the questions are:
Should the accountant be already aware that in general dividends should be based on the self assessments and not annual accounting period? the figures would not be hugely different where the accounting year and self assessment years are close to each other but in my case, they are at least 5-6 months apart. however since individual dividends based on self assessment could be from one or more limited companies, is the accounting right in assuming that he has to provide only the dividends claimed from the company that he is filling this form for? however there is not backing for the figures entered in the dividends as they do not appear in CT600 or full or abbrv accounts. I would purely rely on his expertise as an accountant of which I have no knowledge hence hiring him. in all this analysis, it is evident that he did not do any wrong filing with the figures so no problem form an HMRC perspective but based on the form, I am done for.

Role of Financial Advisor / Mortgage Advisor:
I have known this guy since 2009 since my first application. he has the history of my SA302, Bank statements at the time of each application already made, accounting year full accounts also based on each of my mortgage application. when I request for a new mortgage, he would just ask me for the latest info and missing documents. He would send me the accounts certificate and he would after receiving along with other documents, just call me up and say that the application has been sent and we await decision/underwriting, etc and keeps updating me periodically.
Now once he receives the accounts certificate, in case of Santander, he would complete the form with the details provided in the accountant certificate and since Santander has only one section of financial details, he would average the dividends for the last two years and put in that figures. in this case, that was the same he summed year 2015 and 2014 dividends and averaged it.
However on reviewing the Natwest Application that he has completed, (Natwest does not ask for accountant's certificate), Natwest asks for two years of financial details along side a section called self employment details which consists of the company name, address, role (director), share holding, self employed start date and how long established. Then under Business performance details they ask for the same details as anyone else -
Turnover: Advisor just filled in a random figure picked from thin air...but closely matching my turnover done every year (in my case he just put in 100,000 though in actual it was around the 85,000 mark) for both years
Net Profit before tax: again random number (inthis case 50,000 but does not match the accountant's certificate we previously sent) for both years as 50,000
Applicant's drawings/salary:this is correct based on SA302 assuming he does not look at the accountant's certificate as it is irrelevant for natwest.
Applicant's Dividends:matches the SA302 and again not required to refer to the accountant's certificate
Net assests (less goodwill): £0.00

Now this applicaiton form and after HMRC verification, passes through fine and mortgage is approved and transmitted and completed.
Now the burning questions are: If the advisor knows that he has to fill in the SA302 numbers in the financial details when asked about the business, why does he not do the same when applying for Santander? had he done it, it would have been spotted quite early that the figues in SA302 do not match the Dividends figures in Accountant certificate and hence the dividends he put in the application form also do not match SA302? If he knows that SA302 dividends has to be filled in Natwest form, why did he not do the same when filling Santander application? Is he relying too much on the accountant's certificate that he did not bother to cross check against the SA302 or he just blindly attached SA302 as a requirement and totally basing the application on Accountant's reference? I fail to understand this but as I said I have known him for so many years and either way even if he provided me the application form, I would not be able to spot the difference and challendge as I would not have the knowledge to understand the difference and implication in doing so. Was the FA careless in this case?

Role of Santander:
Advisor told me that they would send the form and we need to get it filled and signed and send it back. There are no help or guidance reference on how to fill the document, so my assumption is that they would assume that the accountant would know how to do it or the advisor would know what goes in there. At the start of applicaiton along with this also the SA302s are sent, in fraud review status, would they not consider the following:
1. was this really fraudlent or could just be a case of mis-information?
2. WHy would the customer send conflicting figures in two forms at the same time as the application? IF we send separately, I could understaned.
3. All 3 years figures did not match with the income verification of HMRC, does this not sound fishy and to review the application or history or query?

Now my final thoughts are that the Banks acted correclty based on the documental evidences they have and hence I stand a very little chance to win against them. Your thoughts?

It ultimately lies with the Advisor and accountant. either of them or both of them have been careless in my application and figures.
1. The account should be knowing what goes in there? Is it because he has never done such kind of document reference before or is not aware of what information goes into that field?
2. Is the FA careless when it came to completeing and verifying the information/documents which he should do carefully as afterall he is the advisor and is it his role to ensure everything is aligned? should he be knowing what goes in where in the documents?

I am not sure how to proceed and if at all i should really go for OMBUDSMAN review as am not sure if they would entertain a blanket appeal rather than a straight forward appeal against santander which I think i won't stand a chance.

Should I just be going ahead with a legal battle against both FA and account or either of the two?

Or is it just that all parties are correct in their own interpretations and i have to live with this for the next 5 years?

Appreciate your expert advise and suggestions.

Regards.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

There's alot of information here to digest. I can't really say why your accountant did what he did that's a matter between you and him however I can tell you what should have been done.

Firstly as I mentioned previously there is no requirement for dividends to be declared on a ct600 nor abbreviated accounts. They are shown on a full set of accounts but for information purposes only. Dividends are only shown on a self assessment and for the period 6th April to 5th April each year. Not the company accounting period.

Each bank have their own requirement when it comes to disclosing information. And as such you provide them with what they require. That being said if santander asked for confirmation of dividends it should have been covered on the sa302 and for the period mentioned above. The company accounts would not form part of the sa302 however the income from the company would be shown on the certificate for the company period not self assessment period. Why he had different figures for each lender requirement is beyond me and should be questioned.

[SXGuy]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

I should also say I'm really unsure why it's resulted in a marker the way it has when a simple correction could have fixed things for you. There's clearly something more to this. Why have santander not accepted a new accountants certificate with matching figures. It wouldn't take much to correct the mistake. I think ultimately there are a few things going on here. The accountant can only disclose information he is privy to. He would know that dividends are declared on self assessment and for the correct tax period, he would also know to ask if there are any other income not covered by himself which should be included in that. And he should also know how to fill out the certificate correctly. Santander have clearly looked at his certificate and noticed the sa302 doesn't match and have raised a query. Why they should not respond with asking you to correct the mistake is beyond me. I don't know enough about cifas markers to know why they decided to use that route. As I say perhaps there's something more sinister at play here I'm unaware of.

[seelam_1]

Re: Unwarranted CIFAS against my Name - Mortgage Application Fraud

Thank you SxGuy.
Much appreciated.

[seelam_1]

Hi,
i have some good news to share.

Finally got rid of the marker. I appealed to Financial Ombudsman and provided all documentation which Santander has not seen before. Santander agreed to remove and I checked myself that the marker is now gone. I was informed as removed end of July.

Last week they sent out an email which I believe both parties might have got and we have until 31st Aug to respond with accepting it or challenging it. I guess Santander will challenge it as they are expected to cover my loss of earning as I lost my job because of CIFAS. However they set the compensation as £600 which I intend to challenge.

i want them to pay me until end of Aug my daily rate as compensation which will be good for me to recover. The reason I say this is because I started a new contract from 26th June which I haven't informed the Ombudsman yet and their decision letter still confirms me as unemployed which is not true now.

planning to ask at least 10k per person on top of the loss of earnings or a £50k person in full and does not matter if it is treated as compensation or loss of earning.

is that reasonable? The final letter sent by Ombudsman clearly stated that Santander should not have applied the marker in the first place. Of course if challenged it can be looked by the Ombudsman or alternatively taken to courts if needed but not sure if I can take that strain though Santander might have the capacity to do that.

let me know your thoughts.