Protect yourself against property fraud

Around 3.3 million cases of fraud were reported in the year ending June 2018, making fraud one of the most commonly experienced crimes across the country.[1] Fraud can impact anyone, but those who are making high-value transactions – such as those buying or selling property – need to be particularly vigilant. Given a large number of conveyancing transactions take place on Friday afternoons, the Law Society has called the issue ‘Friday afternoon fraud’.

The HM Land Registry, which looks after all land and property registrations across England and Wales, reports that fraudulent property sales have more than tripled since 2013. In 2013, there was a reported £7.2 million in fraudulent property sales, while this figure rose to £24.9 million in April 2017.[2] As an attractive target for scammers due to the high asset value, it’s reassuring that the HM Land Registry has been able to stop 279 scams, worth £133 million, from taking place.[3] 

Who is at risk of property fraud?

Scamming techniques are improving alongside technological advances, meaning fraudsters are getting more sophisticated in their approaches and more difficult to detect. Experienced property solicitors are knowledgeable on the different types of property fraud and in taking the right steps to detect, and prevent, fraudulent transactions from happening. This is why it is important to seek out a trusted property solicitor to undertake your conveyancing work, helping to ensure you are as protected as possible throughout the process. Those who own an unregistered property, or who haven’t had a mortgage on the property since 1990, are particularly vulnerable to property fraud.

Those who are in the process of buying property are at a higher risk due to the large sums of money that must be transferred during the conveyancing process – particularly around the time contracts are exchanged, when 10% of the property value will be due as a deposit, and at the time of completion, when the remaining amount is payable to the seller. Would-be fraudsters may try to take over communications between solicitor and buyer, posing as the engaged law firm and sending different bank details for the buyer to transfer to.

Another situation to be aware of is when a property, such as an investment property, has been vacant for a while, or is frequently vacant, and as the owner, you have not been in a position to visit the property. This is because those planning to commit property fraud can use the property as a base to address mail and begin the process of identity theft. Sometimes to open certain accounts, or as a proof of residency, a letter is needed with proof it has been addressed to the property in question. If you’re a frequent traveller and you’re away from your home a lot, or you live far away from an investment property that’s currently vacant, be mindful of the risk of property fraud.

Types of property fraud

There are many different types of property fraud, all of which your specialised property solicitor at Insight Law can talk to you about and can help protect you against. Below are some of the more common types of property fraud to be aware of. 

Title transfers

Through the process of identity theft, fraudsters can attempt to sell your property (acting as you) and then transfer the property into their own name through falsified documents. 

Email hacking

Those looking to commit property fraud may try to intercept emails between sellers and buyers, or the solicitors representing these parties, in order to send their bank details for the transfer to be made to. A solicitor will not likely change their bank details, so it’s important you call your solicitor before making any monetary transaction to ensure your money is going to who you think it is!

Investment scams

If you’ve been approached to invest your money into a buy-to-let scheme that promises high returns, always do your due diligence before making any financial commitment – this is something your property solicitor can help you with. It may be the case that the properties that are being sold are actually in poor condition or they are frequently vacant, the plot of land for sale does not actually exist or is being sold for a much higher price than it is worth. 

 Helping to prevent property fraud

As a property owner, you can take advantage of the HM Land Registry’s free Property Alert service; if there is suspicious activity to the registration details of your property, such as an application to change the ownership details, then you will receive an email alert. You are then in control and can decide to act quickly and notify the HM Land Registry that the change of details was not requested by yourself, you can contact your mortgage lender and also the police to report the fraud.

To register for this free service, head to the Property Alert service on the HM Land Registry website (your property must be registered to use this service). It is possible to monitor up to 10 properties for free, including the property of an elderly family member or friend so that you can keep those you care for safe from property fraud too.

Also, as mentioned, never be shy about reconfirming the bank details with your solicitor – it always pays to be safe! Your solicitor and mortgage lender will also be acting under strict obligations to perform adequate identity checks for anyone they are representing or providing a service to, and they will not hesitate to question documents they do not believe to be genuine. This is all part of the process to ensure you are being protected as much as possible from this risk.

Getting expert property advice

Firstly, do not delay notifying HM Land Registry on their Property Fraud Line if you think you have fallen victim to property fraud by calling them on 0300 006 7030. It is also highly advisable to contact your mortgage lender, the police and to see trusted legal advice from Insight Law as soon as possible. 

Our team specialise in property law and will help keep your castle protected. Call us on 02920 093 600.

 

[1] Office for National Statistics, ‘Crime in England and Wales: year ending June 2018’ 

[2] Financial Times, ‘Help! My house has been hijacked’ (online, 19 December 2017)

[3] The Telegraph, ‘Property fraud: how your house could become the perfect tool for scammers’

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Categories: Guide, Residential

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