How To Protect Your Property From Fraud?

Man Standing With A Fraud Banner

When we think about safeguarding our homes – and what is likely the largest purchase we will make in our lives – we often consider fire, flood, falling trees, theft or vandalism. But how often do we consider protecting our houses against fraud? Unfortunately, more homeowners are experiencing property fraud, and scammers are (frighteningly) becoming quite sophisticated in their methods and tactics.

The consequences can be upsetting, costly and even catastrophic as scams can threaten your most basic sense of security. This guide will discuss how to protect your home from fraud, including common types of property fraud, key risk factors and what to do if you have fallen victim to an unscrupulous person or group.

Increasing Claims Property Fraud

One of the most disturbing aspects when it comes to property fraud is the frequency with which it happens – as well as the ease and simplicity. It’s not as if we’re dealing with masterminds here: in some cases, all a fraudster needs is some basic phishing techniques and identity spoofing tactics. Sometimes, all they need to wreak havoc is to create a fake listing.

According to a study conducted by the Chartered Institute of Public Finance and Accountancy (CIPFA), of 80,000 fraud cases examined, property fraud made up 71%. The UK Land Registry receives more than twice as many claims as they have prevented in the past two decades.

How much does this cost an average homeowner? The average scam pay-out is £107,669, while common online-based scams cost an average of £600. According to some estimates, some 3.5 million people are impacted by property fraud, the cost of which is a collective £3 billion.

What are the odds that you will be a victim? Frankly, they are too high to be ignored. And the consequences can be too costly to bear for average people. This is why it is essential to understand the types of property fraud that are most common and learn how to protect your property.

Explaining Property Fraud

Homes are a lucrative target for scammers. It makes sense: they are worth a considerable sum and can be unscrupulously sold for a handsome profit. How does this happen? Let’s take a look at some common ways fraudsters seek to make money at your expense:

Fraudulent Transfers and Registrations

Imagine this scenario: You return from a work trip to find that your locks have been changed and someone is living in your house. The shock of it must be quite severe. Worse, though, you cannot do anything. A scammer has used phoney identification to impersonate you and has sold your house. Of course, they pocketed the money. The new buyer purchased the house in good faith and is allowed to remain the legal owner.

It is understandable that someone could steal a car, a watch, a phone… but an entire house? It is almost unfathomable. This is not a fictional account: this actually happened to an individual in Luton.

In 2020, the Land Registry shelled out £3.5 million in compensation for transactions they registered that turned out to be fraudulent. While a small figure compared with the overall number of transactions, it is still a sobering number.

Payment Fraud

In this type of fraud, monies paid for transactions are intercepted. This can have significant consequences. For example, one buyer saw £640,000 disappear when criminals intercepted the emails they exchanged with their solicitor. All the fraudsters had to do was copy the original format and layout, switch out the bank details and divert the funds to their own account. Sadly, this person (again, a real case) had to withdraw from the transaction as they were unable to recover most of the funds.

Payment fraud can happen on a big scale like this, but it is also common on smaller transactions.

Investment Scams

Beware the ‘get rich quick’ investment. Too often they are simply scams dressed up to look like opportunities. ‘Just hand over money and watch the high returns roll in.’ This may involve land banking; that is, a property is marketed as holding investment potential but it either cannot be developed or it does not exist at all. Another tactic is buy-to-let. This is when a company asks you to invest in rented properties, promising good returns through rental income. The reality: you’ve just ‘invested’ in a dilapidated structure that is not occupied or even inhabitable.

Homes Advertised Via eBay, Gumtree and Similar Shopping and Auction Platforms

Here, the properties advertised on sites like eBay and Gumtree are not legally owned by the seller. This is another way fraudsters can circumvent the law and usurp you of your rights.

Holiday Homes

In some cases, a fraudster may advertise a property as a permanent residence. In reality, though, they are not intended for or categorised as a main residence as they are classified as a holiday home.

Fake Seller

If you are buying a house, you are also at risk for fraudulent activity. A scammer can pose as the owner, using false identification, sell you the home and walk away with the proceeds. You are in a very difficult situation now. Fortunately, it is one that owners can work to avoid by signing up for the Land Registry Property Alert Service, which we will discuss in a moment.

As mentioned, none of these tactics are especially difficult or requiring of great skill. The sophistication comes in the speed and efficiency with which fraudsters can go after your home, as well as the variety of methods they can employ to this end, from email interception to good old-fashioned eBay ads.

Are You At Risk?

If you own a home or are buying or selling a home, yes, you are at risk. This is the cold, hard truth. There are, however, some circumstances that can increase that risk and leave you vulnerable to scammers.

For example, you are at higher risk if:

  • Your house is empty some or all of the time.
  • Your home is rented out.
  • You live abroad.
  • You do not have a mortgage.
  • You have experienced identity theft.
  • Your home is not registered with the Land Registry.

It is important to recognise that property fraud can happen to anyone and to learn about various nefarious techniques scammers use against you.

Next, we will talk about how to protect your property from fraud.

Protecting Your Home

While it is shocking that so many people are affected by property fraud, the encouraging news is that you can take steps – starting right now – to protect your property and your financial situation.

Check That Your Property Is Registered

All it costs to check if your property is registered with the Land Registry is £3 – and it pays you back in terms of peace of mind. Your home may not be registered if it hasn’t been mortgaged or if it has sold since 1990. Ensure that all of the information is correct, and inform the Land Registry if it is not.

Sign Up for the Land Registry Property Alert Service

This is another layer of protection. If there are searches and applications received against your property, the Land Registry Property Alert Service will send you a notification via email. Let’s say that someone attempts to make changes to your registered property. They may try to change the registered owner or apply to register a mortgage, for example. You will receive an alert.

While it doesn’t block changes, this service does make you aware of what is occurring so you can take protective action in the event of fraud.

Apply for a Restriction On Your Property

You can also apply to put a restriction on your property’s title deeds. This prevents the Land Registry from registering a sale or mortgage unless a conveyancer or solicitor confirms and certifies that you were the one who made the application. If you live at the property, there is a £40 fee. Compared to the potential cost of fraud, this is well worth the small price.

Be Email Savvy

Email-based scams are increasingly common. To protect your property, ask that you receive details from your conveyancer or solicitor via both email and post. If you do not receive a physical version, call and make enquiries.

You also need to:

  • Be very careful when selecting your conveyancer or solicitor.
  • Read everything your conveyancer or solicitor sends to you thoroughly. They should send you their bank details by post and reassure you that those details never change. Train yourself to look at this; the devil is in the details, as they say.

Be wary of anyone who is pressuring you to move through a transaction very quickly.

Do Your Homework

Property investment can be a great way to increase your wealth and diversify your portfolio. Be always be on the watch for fraud. Does a potential investment have a proper physical address and landline number? View the property in person, ask questions about its history, check whether planning permission has been applied for or granted and request detailed plans regarding site development. As well, keep copies. Of everything.

Protect Your Own Identity

Your risk of being a victim of property fraud increases if your identity has been stolen. Take steps to safeguard… well, you. How?

  • Safely destroy all documents with personal and financial information (e.g. bank statements, credit card statements, etc.)
  • Secure your post. You can get a Royal Mail post office box or a private box with a high-quality lock.
  • Be very protective of your National Insurance Number and highly selective of who you provide it to.
  • Take receipts from automatic cash machines, fuel stations and the like and safely destroy them.
  • Do not leave your credit card or banking card unattended. Protect your wallet, handbag, etc.
  • Do not leave your phone or computer unattended. Always password-protect your devices.
  • Monitor your credit report routinely.
  • Review bank and credit statements thoroughly.

Help! What to Do If You Think You’re a Property Fraud Victim

Property fraud is so insidious because it can happen very quickly. You may not even notice at first, as was the case with the person who had £640,000 stolen as it was intercepted through emails. They didn’t realise there was a problem and paid into a fraudulent account. By the time they became aware, the damage had been done.

This makes the case for being highly aware of different types of property fraud and taking steps to protect yourself.

But it happens. We hope it does not happen to you, but if it does, take action as soon as you can. Notify the Land Registry immediately and speak to a trained staff member. They will give you practical advice about what you need to do and what happens next. You can call the Property Fraud line on 0300 006 7030 Monday to Friday from 8:30 am to 5:00 pm. You may also contact through email at reportafraud@landregistry.gov.uk.

Next, seek advice from an independent legal advisor or the Citizens Advice Bureau. The Citizens Advice Bureau is committed to providing people with the information and confidence they need to face and overcome challenging situations. Property fraud certainly qualifies as a challenging situation.

You can also report your issue to Action Fraud at the National Fraud and Cyber Crime Reporting Centre. They will also provide advice and support over the phone and connect you with services that can help. They do not investigate claims but your report will be passed on to the National Fraud Intelligence Bureau and you will receive a police crime reference number so that you can follow up.

Protect Yourself and Your Property

Fire, flood, leaks, mould… When you own a home, there are a variety of threats always knocking on the door. But also remember to consider property fraud as a clear and present danger.

The steps we have mentioned in this guide on how to protect your property from fraud are relatively simple and easy. It does not take a lot of time or effort, for example, to sign up for alerts from the Land Registry or to double-check details in your solicitor’s or conveyancer’s emails and posts. But taking those few minutes, being that extra measure of diligence, can have a big impact.

Remember, too, that there are resources and services out there to help, from the Land Registry to independent financial advisors and fraud detection specialists. You are not in this alone, though it can feel this way initially. Every homeowner is facing the possibility that they will be victimised, unfortunately. But the positive news is that we can take action. The best time to start is right now.

Put your action plan to safeguard your property into play, and if you need help or support, do not hesitate to reach out to professionals who are trained in detecting and fighting fraud. It is a frightening experience that we would wish on no one. Keep yourself, and your property, safe

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