FCA investigates mortgage fraud at low

The Financial Conduct Authority (FCA) has opened just one enforcement investigation into mortgage fraud in 2025, according to new Freedom of Information data obtained by Thirdfort, the intelligent client due diligence platform. This striking figure brings to light a concerning trend in regulatory activity, with last year’s numbers nearing the near-zero enforcement seen during the pandemic. This drop raises questions about whether regulators are adequately keeping pace with the rapidly evolving threats posed by fraud, particularly as new technologies and methods are employed by criminals.

The data emerges in the backdrop of the Home Office publishing its Fraud Strategy 2026–2029 in March. This strategy acknowledges the increasing digitalisation, globalisation, and sophistication of fraud while committing £31 million to a new Online Crime Centre. This centre aims to unite expertise from law enforcement, financial institutions, and technology firms to combat organised fraud effectively. However, the FCA's enforcement record presents a contrasting picture, revealing that the total number of FCA mortgage fraud investigations since 2018 stands at just 18. The solitary figure for 2025 marks a significant retreat from the three to four cases per year documented between 2022 and 2024.

The apparent decline in enforcement coincides with mounting evidence that mortgage fraud, along with fraud more broadly, is both escalating and becoming increasingly challenging to detect. Experian's Q4 2025 Fraud Index indicates that mortgages are the only lending product to witness a fraud increase during the period, challenging a general decline observed across five other analysed categories. Adding to this, Cifas's Fraudscape 2026 report highlights how AI-enabled document forgery and synthetic identities complicate fraud detection, allowing criminals to create convincing profiles and fake documents with remarkable efficiency.

Olly Thornton-Berry, co-founder and CEO of Thirdfort, voiced his concerns regarding the FCA's low enforcement activity. He remarked that "one FCA investigation in an entire year is a striking number, and we don't think it reflects the true scale of the problem." He further noted that while the FCA is a critical part of the enforcement network, alongside the NCA, SFO, and local police forces, the current trajectory is troubling. He warned that "fraud is getting faster, more convincing and harder to detect, and AI is accelerating that shift." Despite the government's new fraud strategy being a positive move, Thornton-Berry stressed that enforcement alone will not suffice, especially as fraudsters can generate credible fake identities and documents rapidly. He concluded by emphasising the need for professionals in property transactions to adopt technology that can match the pace of evolving threats in real time.