Property fraud is on the rise – how to avoid falling victim to ‘sophisticated’ scammers

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Phil Spencer gives home buyers advice on fraudsters

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The warning comes as new figures from the Office of National Statistics reveal soaring numbers of people fell victim to cons last year. Now Colum Smith, an expert in combating property fraud at Taylor Rose MW Solicitors, says those looking to capitalise on this year’s booming housing market, which has seen prices soar, need to be on their guard.

He said: “We are noticing how those carrying out property fraud are becoming increasingly sophisticated in the ways they target both individual property owners and conveyancers involved in the transaction.

“The pandemic has made things worse. It has meant you can purchase a property without meeting your mortgage broker, surveyors, and conveyancing solicitors in person.

“With communication taking place over emails and phone calls it is even easier for fraudsters to infiltrate and impersonate as one of the parties involved.

“It’s important to realise you can’t rely on your bank or building society or the police to help you if you fall victim to a fraud. It’s vital then you take proactive steps to protect yourself from these scammers.

“The Land Registry was forced to pay out £3.5m in compensation to homeowners last year after approving fraudulent transactions, up two thirds on the prior year, and it has thwarted close to 200 other attempted frauds worth £115m since 2016.”

But thankfully, according to Smith, there are many things you can do.

Pointing out the most common type of scams he says: “Fraudsters pretending to be buyers is so common.

“They make an offer but withdraw before exchanging. Then they later use the information to forge documents and transfer the property to them.

“But the situation can be flipped around too with fraudsters pretending to be sellers.

“This has grown because information of homeowners is available on the Land Registry site. It has seen fraudsters regularly impersonate the property owner and dispose of the property quickly to cash buyers.

“We are also often seeing cases of fraudsters pretending to be conveyancing solicitors.

“The scam involves fraudsters hacking email accounts of conveyancing solicitors and asking you to transfer money to them, usually on a Friday afternoon when you don’t have time to verify.

“Another growing trend sees fraudsters posing as rental agents. Criminals advertise a rental property and pressure interested parties to pay a holding deposit. They then disappear with the holding deposit.”

But the good news, according to Smith, is that lots can be done to prevent it.

“Start by always asking plenty of questions to make sure that the seller is genuine,” he said.

“This is particularly important if you are a cash buyer. Second, you should also instruct your solicitors to check and verify the identity of the seller.

“Third, do not transfer any money to the conveyancing solicitors without first calling them to verify the instructions and bank details.

“Four, avoid rushing to complete on a Friday afternoon. Only talk to FCA-approve mortgage brokers and obtain loans from a reputable bank. Beware of property that you only see on a website (like an auction property) but can’t visit in person.

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“Fifth, if you’re a homeowner visit the Land Registry site and sign up for Property Alert. But be mindful too that criminals can continue to operate long after you’ve got the keys to your property.

“It’s vital that you ensure you have all your documents and paperwork in order and that you take steps to redirect all your post and correspondence quickly.

“Lastly, we now urge our customers to use a service called SlothMove who takes care of this process. It allows you to get all of your mail redirected and ensures a myriad of personal information relating to you and your family is safely landing on your new doormat each month.”

Jonathan Rolande, from the National Association of Property Buyers, added: “Property fraud is a continuing problem in the market and those moving home should constantly be on their guard.

“Estate agents and conveyancing firms are regularly undergoing training but they should never get complacent and constantly review their measures to try and stay one step ahead of these criminals.”

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