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Property Fraud: how to protect yourself, your purse and your property…

Property fraud is on the rise. The COVID-19 pandemic has given fraudsters new opportunities to ply their trade. The high value of transactions and an accelerated move towards more online conveyancing has made property the perfect target. In 2020 alone the Land Registry had to pay out £3.5 million as compensation for property fraud, and the average victim of fraud losses £101,000.

So then, how can you spot fraud and what can you do to protect yourself from falling victim?

What is property fraud, and how can you spot it?

Generally speaking, fraud is an intentional or deliberate act designed to deprive someone of something. Property related fraud comes in many forms. You are most at risk if your property:

  • is unregistered;
  • is rented out;
  • is not mortgaged;
  • stands empty; or
  • you live abroad.

The most common form of property related fraud occurs during the conveyancing process itself. Typically, the fraudster will intercept emails or mine personal information about their target and then impersonate a party to the conveyancing, then request deposit or completion monies are paid to them.

This kind of fraud can be easy to spot – you receive an email purporting to be from your solicitor which is riddled with spelling mistakes or factual errors. Some other red flags to look out for during the conveyancing process include:

  • Receiving a completely unexpected request to pay additional costs or bills;
  • Receiving a request for you to transfer monies using bank details which are different to those previously used;
  • The email address of the sender has changed or does not match the solicitors website;
  • The sender is addressing you differently (i.e. if you have previously addressed emails on a first name basis, and then suddenly becomes more formal).

Two recent BBC articles have shown that fraud is becoming more sophisticated and harder to spot. The first involved a vicar who, after having his identify stolen, discovered that his house had been stripped and sold without his knowledge. The second concerned a failed attempt to sell a woman’s property by a fraudster who managed to forge a power of attorney.

How can you protect yourself?

In the first instance you should trust your intuition. If you feel like something you’ve received is suspect or if you are being pressured to send unexpected funds then challenge it. You should call your solicitors and ask them to confirm the legitimacy of a request. You could even pop into the office to avoid all doubt.

Where the fraud is more sophisticated or if it occurs outside of the conveyancing processes (as with the two BBC articles above), then a more boot and braces approach may be the only effective protection.  Here are two steps you could take to protect your property:

Place a restriction on title

The Land Registry allow restrictions to be placed on the title of your property which prevent them from registering a mortgage or sale unless your solicitor has certified that the applications were made by you. Solicitors are duty bound to carry out sufficient due diligence to ensure that their clients are who they say they are. This means that placing a restriction on your title will afford a good amount of protection from fraud.

Receive property alerts

In addition or in alternative to the above, it is possible to sign up to the Land Registry’s property monitoring service. Once signed up, you will receive an alert email if someone applies to make a change to your property register (i.e. if someone tries to sell or mortgage it). This does not prevent changes from being made, but it does give you a heads up which will allow you to take action.

If you have any questions about this article, or if you would like assistance in putting a restriction on your title, then please get in touch with a member of our Property Department.

Written by Tom Spratley – Trainee Solicitor.

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