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A need for quality controlRon Littquality control, Far West Credit Inc., In light of the recent findings and fines charged by the Federal Trade Commission (FTC) concerning the credit reporting company Far West Credit Inc. not following reasonable procedures to assure the accuracy of the information on consumer reports, credit reporting companies, lenders and brokers need to be on alert. Why? Mortgage fraud is running rampant. It's everywhere in the industry. It's not only the borrower getting the raw end of the deal either. Ninety percent of mortgage fraud is due to an insider - someone in the mortgage business - be it a broker or even a lender. Lenders, brokers and borrowers need protection for their business and themselves, but what's being done to provide it? Will this continue to happen? Fortunately, more and more mortgage fraud cases are being caught. Unfortunately, most are after the fact. In a recent case, Far West Credit Inc. accepted incorrect information from interested parties to show the consumer's credit status with businesses such as cable companies, utilities and insurance companies and added it to the consumer's credit report. The information Far West received was incorrect and not adequately verified, resulting in charges from the FTC. The key to preventing mortgage fraud lies in quality control. If Far West had a checks and balances system in place, the company would not have to pay the settled FTC charges. Anyone, including your co-workers, can create fraudulent credit reports that can pass for the genuine thing if there are no operations procedures, record keeping or requirements to assure maximum accuracy. A quality control and assurance department is absolutely necessary for this very reason. In an industry that is trying to find better ways of funding underserved or unbanked markets, news like this puts a strain on support for progressive credit alternatives. A lack of quality control damages the potential growth and interest in new products and services for the underserved, and it costs the industry millions of dollars in new revenue and losses because of fraudulent loans. Payment Reporting Builds Credit (PRBC) recognizes this and is the first-ever credit bureau to provide the industry with a tool to help fund the unbanked markets. PRBC demonstrates the creditworthiness of rental and other bill payments while providing verification partners to review and ensure that all information is correct. "PRBC allows only the consumer to provide payment information and assures the reliability and quality of historical data that is provided by utilizing Fair Credit Reporting Act-certified specialists from verification partners such as Advantage Credit," said Matthew Vitko, PRBC director of business development. "These specialists verify Social Security number, current address, historical lease, mortgage, utility, phone, cable and other recurring bill payments, along with judgments and collection accounts. PRBC's procedures for historical verifications meet and exceed the requirements of the FTC, HUD, FHA, VA, Fannie Mae, Freddie Mac and secondary markets for both consumer and business credit." With mortgage fraud on the rise, it is reassuring to know that industry leaders are setting a standard of enforcing quality control measures. Brokers and lenders need to take quality control seriously and not on the back end of the process, when it is too late. If everyone, including reporting companies, brokers and lenders, takes proactive steps, I believe that we will see a decline in this criminal act of mortgage fraud. Ron Litt is president of Pensacola, Fla.-based Advantage Credit International and an industry veteran with more than 41 years experience in the information and mortgage industry. He can be reached at (800) 600-2510 or e-mail at [email protected]