ING added customers to fraud registers without sufficient proof, appeals court rules

A suspicion of mortgage fraud is not enough to add clients to external fraud registers, the Amsterdam Court of Appeals ruled in a case filed against ING by two people accused of mortgage fraud. ING needs concrete evidence that fraud was committed before taking this step, the court said in the ruling on October 27, which was published today.

The case involves a couple who applied for a mortgage of €500,000 through ING in early 2022. A mortgage broker and an administrative firm were involved in the application process. In late 2024, the Public Prosecution Service (OM) notified the bank that the owner of the administrative firm, Qontinu, was suspected of falsifying income data to help clients secure larger mortgages.

ING then accused the couple of manipulating the 2021 annual financial statement for the business owned by one of them. The bank terminated the mortgage agreement and added both clients to two fraud registers: the External Referral Register and the register maintained by the Mortgage Fraud Prevention Foundation.

According to ING, the 2021 financial statement depicted a too favorable picture of the business’s financial state. The reported revenue did not correspond to the invoices issued, which were either not paid or only partially paid, ING said. The bank also argued that the owner of Qontinu stated that all the clients who applied for a mortgage through her firm knew that she manipulated figures.

The couple denied committing fraud and took the matter to court. The first court ruled in ING’s favor. The Appeals Court came to a different conclusion. According to the Court of Appeal, ING did not have concrete evidence that the couple committed fraud.

For one of the clients, there was no evidence that he was involved in fraud. He co-signed the mortgage application, but he was not involved in his partner’s business or its bookkeeping. ING did not provide evidence that he knew, or even ought to have known, that potentially incorrect figures had been used.

The Court of Appeal also found the suspicion against the other client insufficiently substantiated. She submitted further documentary evidence and expert statements showing that the questioned invoices were paid partially by the clients’ health insurance and partially by the clients themselves. The Appeals Court finds it plausible that this explains the discrepancies ING had identified.

According to the Court of Appeals, it is therefore plausible that the mortgage application did not present an inaccurate picture of the business’s financial situation. The Court of Appeals also noted that the Qontinu owner saying all her clients were aware of her fraud practices does not automatically prove that fraud occurred in every single client’s case.

The Court of Appeals ordered ING to remove the two clients from the two fraud registers within eight days of the ruling. Failure to do so will result in a fine of €1,00 per day, up to a maximum of €100,000. ING also has to pay the couple’s legal fees.