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Some mortgage lenders say that the use the main credit reference systems (the ones you and I can check easily and cheaply) and a satisfactory reference will be the basis of their decision to lend. They then check with National Hunter to make sure it's not a potentially dishonest application.
As we said in our first part of this article, completely honest people could have an application turned down for totally innocent reasons. National Hunters consider an application to be “inconsistent” if there is a “clear discrepancy between information provided by the consumer and information found, or not able to be found or verified elsewhere.” This means that what you have told a lender may be totally honest but National Hunter is unable to verify it.
If your application is turned down and you query the rejection, you're likely to be sent a letter from the lender, which will be a standard one, and will refer you to the usual credit agencies. You'll not be informed about National Hunter and very few people have heard of them or what they actually do. They don't publicize their existence or even give a full address, beyond a PO Box number which belongs to an insignificant office on a back street in Stoke-on-Trent.
A spokesman for the company made the statement “Any member of the public who wishes to obtain details of information we hold about themselves as individuals can request them under Section 7 of the Data Protection Act.” They also admitted that it was sometimes not easy to know about their existence.
Apparently lenders using National Hunter's services are supposed to include certain elements within the declaration and fair processing part of application documents. The wording should give an indication of which fraud protection agencies are used and how to find this information. National Hunter says “Our members must ensure that this information is made readily available to the applicant and preferably by the means of a dedicated phone number. If you ask your bank, it has to tell you of our existence.”
They said that in their opinion, lenders should not base their decision on whether or not to lend on just one alert. Automated decisions are not allowed and they would be concerned if this was happening.
Concern has been expressed by the information commissioner who has responsibility for data protection issues, regarding the rejection of application solely on fraud grounds. He says that no database can be one hundred per cent foolproof.
We think that National Hunter could be more visible – something that they themselves accept. Clearly fraud and identity theft is of concern but open-ness in checking applications would surely lessen the number of mistakes which can cause problems for loan applicants.