When it comes to protecting our homes – likely the biggest purchase of our lives – we often think about fires, floods, falling trees, theft, or vandalism. But how often do we consider protecting ourselves from property fraud?
Unfortunately, more and more homeowners are experiencing it, and scammers are becoming more and more sophisticated in their tactics.
The consequences can be devastating, expensive, and even catastrophic. Property fraud can threaten our sense of security, which is why it is important to know how to protect yourself from it.
This article will discuss common types of property fraud, the key risk factors, and what to do if you become a victim.
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Increasing Claims Property Fraud
Property fraud is an unfortunately common and alarmingly simple crime. Fraudsters don’t have to be masterminds to pull it off – all they need are basic phishing tactics, identity spoofing, or even just creating a fake listing.
It’s no wonder that the Chartered Institute of Public Finance and Accountancy (CIPFA) found it to make up 71% of the 80,000 cases examined.
The UK Land Registry has seen twice as many claims as they have prevented in the past two decades.
The average scam pay-out is £107,669, while online-based scams average £600. This means that 3.5 million people are affected by property fraud, with a collective cost of £3 billion.
The odds of being a victim are too high to ignore, and the consequences are too costly to bear for the average person. It is essential, then, to understand the most common types of property fraud and learn how to protect your property.
As a responsible property-buying company, we have several checks, including Anti-Money Laundering, to ensure that sellers are who they say they are. You also need to consider money laundering checks when buying a house.
Explaining Property Fraud
Homes are a lucrative target for scammers as they are worth a lot of money and can be sold for a huge profit.
How does this take place? Here are some common methods fraudsters use to make money off of you:
Fraudulent Transfers and Registrations
Imagine this scenario: You come back from a work trip to find that your locks have been changed and someone is living in your house. The shock must be quite intense.
Unfortunately, there is nothing you can do. A scammer has used fake identification to pretend to be you and has sold your house.
The money, of course, went to them. The new buyer bought the house in good faith and is now legally allowed to stay.
Stealing a car, a watch, or a phone is one thing, but an entire house? It’s practically unimaginable. This isn’t a made-up story – it happened to someone in Luton.
In 2020, the Land Registry gave out £3.5 million in compensation for fraudulent transactions they registered. Although this is a small amount compared to the total number of transactions, it’s still a significant figure.
Payment Fraud
In payment fraud, money that was supposed to be used for transactions is intercepted. This can have far-reaching consequences.
Take, for instance, the case of a buyer who lost £640,000 when criminals intercepted the emails exchanged with their solicitor. All the crooks had to do was imitate the original format and layout, replace the bank details, and divert the funds to their account.
Unfortunately, this individual (as it was a real case) had to abandon the transaction since they could not recover the majority of the money.
Payment fraud can happen on both large and small scales. However, it is more frequent in smaller transactions.
Investment Scams
Beware of those “get rich quick” investment schemes. More often than not, they are just scams masquerading as opportunities.
“Simply hand over money and watch the high returns come in.” Land banking is a popular strategy; it involves marketing a property as having investment potential when in reality, it either cannot be developed or doesn’t even exist in the first place.
Then there’s buy-to-let, a situation where a company requests you to invest in rented properties, claiming that you’ll get great returns from rental income. The reality: you’ve just “invested” in a dilapidated building that isn’t even livable.
When it comes to properties advertised on sites such as eBay and Gumtree, the seller doesn’t even have a legal claim on them. This is yet another way for fraudsters to break the law and steal your rights.
Holiday Homes
In some cases, a fraudster may try to market a property as a permanent residence. However, it is not meant for or classified as a main residence since it is classified as a holiday home.
Fake Seller
If you’re buying a house, you’re also exposed to potential fraudulent activity. A scammer could pretend to be the homeowner, using false identification, sell you the home and walk away with the money.
You may be in a difficult position right now. However, owners can take steps to protect themselves by signing up for the Land Registry Property Alert Service, which we’ll discuss in a moment.
These tactics don’t require any special expertise. The problem is that fraudsters can act quickly and use a range of methods, such as intercepting emails and advertising on eBay.
Are You At Risk?
If you are a homeowner or are in the process of buying or selling a home, then you are at risk. This is a fact that we must accept. There are some situations which can put you more at risk and make you more vulnerable to fraudsters.
For instance, if your house is empty regularly, if it is rented out, if you live abroad, if you do not have a mortgage, if you have been a victim of identity theft, or if your home is not registered with the Land Registry, then your risk is higher.
It is important to be aware that anyone can become a target of property fraud and to understand the tactics that fraudsters use.
Next, we will discuss ways to protect your property from fraud.
Protecting Your Home
It is alarming that so many people are victims of property fraud. However, there is some good news: you can take action today to safeguard your property and finances. It is possible to begin protecting yourself right away.
Check That Your Property Is Registered
For just £3, you can check if your property is registered with the Land Registry. It’s a small price to pay for the peace of mind it brings.
If your home hasn’t been mortgaged or sold since 1990, it might not be registered. So, make sure all the details are correct and, if not, let the Land Registry know.
Sign Up for the Land Registry Property Alert Service
The Land Registry Property Alert Service provides another layer of protection. If any searches or applications are made against your property, you will be notified via email.
For example, this could happen if someone attempts to modify the registered owner or register a mortgage. You will be alerted, allowing you to take protective action if fraud is suspected.
This service does not block any changes, but it does make you aware of them so that you can take the necessary steps.
Apply for a Restriction On Your Property
You can also apply to put a restriction on your property’s title deeds. This will stop the Land Registry from registering a sale or mortgage unless a conveyancer or solicitor confirms and certifies that you were the one responsible for the application.
If you are living at the property, there is a £40 fee. This cost is minimal in comparison to the potential cost of fraud, making it worth it.
Be Email Savvy
Email scams are becoming increasingly common, making it essential to take the proper precautions. To protect your property, request that your conveyancer or solicitor provide you with details both via email and post.
If you don’t receive a physical version, call and make enquiries.
When selecting your conveyancer or solicitor, be very careful. Read any documents they send to you thoroughly.
They should send their bank details to you by post and make sure you understand that they will never change. Always check these details carefully; it’s the little things that matter.
Be wary of anyone who is pushing you to move quickly through a transaction.
Do Your Homework
Property investment can be a great way to increase your wealth and diversify your portfolio. However, be sure to watch out for fraud.
Always make sure potential investments have a proper physical address and landline number, and view the property in person. Ask questions about its history, check if planning permission has been applied for or granted, and request detailed plans about the site development.
Don’t forget to keep copies of everything.
Protect Your Own Identity
Your risk of being a victim of property fraud increases if your identity has been stolen, so it is important to take steps to safeguard yourself. How can you do this?
- Destroy all documents with personal and financial information, like bank and credit card statements, securely.
- Get a Royal Mail post office box or a private box with a high-quality lock to secure your post.
- Be very careful with your National Insurance Number, and only give it to those you trust.
- Keep and then destroy receipts from automatic cash machines, fuel stations and the like.
- Never leave your credit card or banking card unattended, and protect your wallet, handbag, etc.
- Don’t leave your phone or computer unattended either, and always use a password to protect your devices.
- Monitor your credit report regularly.
- Check your bank and credit statements thoroughly.
Help! What to Do If You Think You’re a Property Fraud Victim
Property fraud is so damaging because it can occur at an alarming speed. In one case, someone had £640,000 stolen by hackers, who intercepted emails and redirected money to a fraudulent account. It was only when the person became aware of the issue that it was too late.
It’s important to stay alert and take steps to protect yourself from different types of property fraud. However, if you do become a victim, you must act quickly to limit the damage.
Call the Property Fraud line on 0300 006 7030 (Monday to Friday, 8.30 am to 5.00 pm), or send an email to [email protected]. You should also seek advice from an independent legal advisor or the Citizens Advice Bureau.
The Citizens Advice Bureau is committed to providing support and guidance in challenging situations such as property fraud.
Finally, report your issue to Action Fraud at the National Fraud and Cyber Crime Reporting Centre. They can offer advice and support over the phone, as well as connect you with services which can help.
They do not investigate these claims, but they will pass your report on to the National Fraud Intelligence Bureau. You’ll be given a police crime reference number so you can follow up.
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