GTA brokerages being investigated: Globe and Mail

GTA brokerages being investigated: Globe and Mail

A number of mortgage brokerages in the Greater Toronto Area are being audited by the federal privacy commissioner due to concerns over the security of client information, according to a report in the Globe and Mail.

The audit resulted from 15 notifications of privacy breaches involving brokerages' handling of personal financial information, Anne-Marie Hayden, a spokeswoman for the privacy commissioner's office told the Globe. She added that the audit is in its preliminary stages and the law does not require the brokerages to come forward with the fact that a breach has occurred.

The article quotes Mortgagebrokers.com CEO Alex Haditaghi saying there is "tremendous fraud going on in the broker industry," while CAAMP president, Jim Murphy, told the Globe that most brokerages have policies in place to safeguard borrower information, adding that privacy laws are so strict that brokers can have trouble sharing information with police.

When reached, the Financial Services Commission of Ontario, which is responsible for the oversight of the province's brokers, did not comment on the story, referring CMP to a document from April where it said it had received complaints from mortgage brokerages about agents who were accessing clients' credit information without proper authorization.

"The mortgage brokering industry's reliance on personal information to complete mortgage transactions makes it a target for individuals who wish to gain access to personal information for the purpose of engaging in criminal activities," it said. "Mortgage brokerages must be diligent in their efforts to screen applicants and structure their business practices to minimize the risk to the public."


CMP would like to hear your thoughts on these complaints. Use our comments section below to weigh in.

 

15 Comments
  • Bryan Slaney 2009-09-04 3:30:03 AM
    It is very irresponsible to say"there is tremendous fraud going on in the broker industry". I pride myself in my professional dealings with clients, respecting their rights and upholding the letter of the law. This article says I am fraudulent. There is fraud but my bet it is the minority that paints reponsible broker agents all the same and really hurts my chances of surviving as a vital business.
    Bryan Slaney AMP, B.A., M.Ed
    Slaney Mortgages/Invis Inc.
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  • Donald Wilson 2009-09-04 3:34:49 AM
    I am convinced that the mortgage brokerage industry is currently undergoing a major shift towards larger and more sophisticated brokerage companies, in part due to the increased costs associated with compliance with regulators and government oversight. The theoretical advantage of a small brokerage company is that the designated individual can have an extremely intimate knowledge of his brokers and their deals, on a case by case basis. Compliance is much simpler in some respects, but unfortunately it is clearly hit and miss.

    Some small brokers are extremely diligent and pay full attnetion to compliance issues. Many, I suspect, are finding it difficult to keep up with the many regulatory obligations while they operate as full time sub-brokers or agents at the same time as running the brokerage company.

    Larger company have a destinctive advantage in being able to afford a full time compliance person, and administration department to handle transaction records.

    Criminal use of credit information for identity theft, or other forms of fraud should always be top-of-mind for brokers who have access to Credit Information. It is one of the best arguments yet for maintaining electronic records only, with no paper to end up in the hands of fraudsters.

    It is necessary to have good security on your computer records, to prevent the same kind of invasion of privacy, but it certainly simpler than trying to manage paper records in a business that many brokers are doing from home or the back seat of their car.
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  • GuardianAngel 2009-09-04 3:35:49 AM
    As long as these fraudsters get away with their criminal activities, this issue won't go away. Why not put these people in jail for 10+ years, maybe they'll think twice. Its a disgrace to see these people walk free after so many are affected by their activities. Meanwhile the honest ones have to deal with the perception that all mortgage agents are crooks.
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