Avoiding the alarming increase in property fraud
In recent years, property fraud has increased at a worrying rate with more and more daring and elaborate scams coming to light. The rapid increase in the value of property over recent years is probably a significant factor driving this type of fraud. Samantha Bellamy, Chartered Legal Executive at Penderlaw Solicitors in Truro discusses this alarming trend and outlines some ways to prevent it happening to you.
So how does it happen?
To commit this type of fraud, criminals need to steal the identity of the owner of the property, so identity theft is generally the starting point for property fraud. Once a criminal has stolen someone’s identity, they can potentially gain the legal title of their property by registering their name on the official title registers held by the Land Registry. Once the criminal has their name on the legal title, the criminal can borrow money against the property or even sell it and keep the proceeds of the sale for themselves.
Some headline grabbing examples of property fraud
Several cases of this have made the headlines in recent years, including that of the Reverend Mike Hall. Poor Reverend Hall discovered that his home had been sold to a new owner after returning from a period of working away from home. Whilst he was away, neighbours had contacted him to tell him that there was building work taking place in the house. On returning home, he discovered his key wouldn’t open the front door. A stranger then opened the door, and he immediately realised that the entire place was in the process of being stripped out. Reverend Hall tried to access the Land Registry’s documentation online only to discover that the property had been transferred into the new owner’s name a few weeks earlier.
“Why bother breaking in when you can steal the whole building?” Max Hastings
Another case to make your hair curl was featured in the Daily Mail a few years ago where columnist Max Hastings wrote about an incident where fraudsters sold his wife’s house without her knowledge – “Why bother breaking in when you can steal the whole building?” was his wry response. You can read his article about his experience here https://www.dailymail.co.uk/news/article-3356929/The-thieves-stole-wife-s-house-sold-1-3million.html
More common than you might imagine
You might well ask, how on earth something like this could happen? Well, sadly it does, and unfortunately these are not isolated incidents. In the case of the Reverend Hall, the Land Registry had been duped with fake ID – a fake driving licence had been used to set up a bank account in Mr Hall’s name to receive the proceeds of the sale. In the case of Max Hasting’s wife, the fraud was more complicated. Someone had actually changed their name by Deed Poll to his wife’s and had a passport issued in that name which demonstrates the extraordinary lengths some people will go to in order to commit this type of fraud.
The shift to online for many services has given further opportunity for criminals making property fraud an increasingly common problem.
Properties most at risk
Some properties tend to be more at risk than others. According to the Land Registry, properties most at risk include:
• Those with no mortgage – this avoids any checks by banks or building societies which could pick up something is amiss
• Rented properties where the landlord isn’t living locally
• Properties which are left unoccupied for extended periods
So, how can you avoid this happening to you?
The Land Registry offer a free Property Fraud Alert service to homeowners. This will mean that you will receive an email alert from the Land Registry when official searches and applications are received for your property. This would act as an early warning that you were being targeted by fraudsters as official searches are completed ahead of most property sales when the buyer or lender’s conveyancer searches the Land Registry for information relating to that property . You can find out more and sign up at https://propertyalert.landregistry.gov.uk/
Other ways to protect yourself and avoid identity theft and property fraud include:
• Applying to put a restriction on title deeds of your property, preventing the Land Registry from registering a sale or mortgage unless a conveyancer or solicitor certifies that the application was made by you
• Always use a trusted number to check that an account number you are paying is genuine
• Protect your identity from being stolen – be careful how you dispose of documents with your name and address on, store documents carrying personal information safely e.g. passport, driving license, utility bills, bank statements etc and report promptly if any are stolen or missing, use strong passwords and an authentication step, be alert to phishing and spoofing
The Information Commissioner’s Office
More information on prevention of identity theft can be found on the Information Commissioner’s Office (ICO) website. The ICO is the UK’s independent body set up to uphold information rights.
Get in touch
If you are looking to buy or sell a property, our friendly and experienced property team would be pleased to hear from you. You can reach them by emailing email@example.com or by calling 01872 241408