Five audited mortgage brokerages need to better secure their customers' personal information from theft, Privacy Commissioner Jennifer Stoddart said yesterday in a report.
River City Financial Services President David Armstrong weighs in on the report and talks to CMP reporter Nick Lypaczewski about what the audit did right and what the Privacy Commission can improve.
What are your thoughts on the security concerns brought up by the audit?
I agree with a lot of the concerns, although I do feel they're singling out mortgage brokers to a certain extent. This is a problem, I think, in the entire credit industry, not just brokers. Many financial institutions, banks included, they have cubicle-type offices where personal information is often out and about. I do agree with the concerns, but I don't think that it's right to single out mortgage brokers; I think they should have focused on the entire credit industry.
How do you think imposter-brokers are so easily able to rip-off customers?
In Alberta, we have very stringent licensing requirements and I think it's something that the entire country should follow. Before you can obtain a license in Alberta, you not only have to go through the course, you also have to get a certified criminal record check completed where you're actually fingerprinted. It's a lot more thorough in making sure the people who are being registered are who they say they are and, because you have to go through that process, you can't register someone to work for you as a mortgage broker until they've been cleared by our provincial licensing body. We, as a mortgage broker, can't put somebody onto our employ and register them until they've been cleared by the Real Estate Council of Alberta through this process.
Are there any other security concerns you can think of that Stoddart's report didn't address?
The problem is, we work in a very competitive environment so financial institutions access credit bureaus without obtaining signed authorization up front. You can't restrict one entity and not restrict another because it makes for an unlevel playing field. I think you need to bring about some new strict rules for the entire credit industry and then, if it was a level playing field and everybody had to follow those same rules, everybody would be better protected. My main concern, frankly, over the security of information is on the paper side of things. We are required to maintain client files far too long and it's really a duplicate file that the lender has. Our provincial licensing bodies and various government agencies actually require us to keep these paper files for a long period of time and that's your biggest risk. We should be allowed once the mortgage funds to destroy the file in its entirety other than maybe the client's authorization and a couple of other things because the lender has all that information already.
Do you think Stoddart's recommendations will stop the problem and to what extent?
I don't think they go far enough. I think, again, the biggest issue is around the storage of files. Why are we keeping them for so long? We don't need to have this information. I've been in business for six years; I've never had somebody come to me asking me to view this information i.e Revenue Canada, a lender, auditor, that kind of thing. I think that [the report] will help and it certainly brings awareness to the problem but I think we need to really address this not as a mortgage broker industry but as a credit industry. You can't single out just mortgage brokers; you have to have the same rules for everybody that's lending money and everybody that's accessing this information and you need to tighten the rules.
Read Stoddart's full audit on selected mortgage brokers.
Mortgagebrokernews.ca news brief on Stoddart's report that mortgage brokers need to improve customer security.
MORTGAGEBROKERNEWS.CA WEB EXCLUSIVE: CMP staff writer Heather Li talks to Greg Viger, accredited mortgage professional with Dominion Lending Centres Financial Ltd., about mortgage brokers protecting their clients' information.