Property fraud is proving to be an increasingly profitable business for criminals with scams robbing victims of £107,669 on average. What’s more, the total number of successful frauds is more than double those that have been prevented.
Research conducted by ABC Finance found that fraud committed through the Land Registry resulted in compensation to victims of £107,669 on average, compared to online scams which cost punters around £600.
A study by the Chartered Institute of Public Finance and Accountancy (CIPFA) of 80,000 cases of fraud in UK local authorities revealed that property cons accounted for 71% of all fraud that was detected or prevented. In terms of value, council tax is the second most profitable swindle but accounts for only 9% of total theft.
And it’s not only homeowners who are targeted. Renters are just as likely to fall foul of crooks. From 2014 to 2018, there were 18,546 cases of rental fraud with victims losing £1,396 on average.
Whether you’re a homeowner, landlord or tenant, there are many ways in which scammers can steal your property. We’ll take a look at some of the main methods used and how you can protect yourself.
A fake vendor can gain possession of and sell a tenanted property by posing as the homeowner, changing the details on a property registered with the Land Registry and selling the house if they are successful. One way of preventing this is to ensure the seller is registered with Property Fraud Alerts available from the Land Registry.
You can also apply for a restriction, which means that any potential sale of or mortgage on your property must have your identity confirmed by a conveyancer or solicitor. If you don’t live in the property but own it privately, the service is free. If you live in the property, there’s a charge of £40 to pay.
Another common type of scam is the Friday afternoon fraud. Many property completions occur at the end of the week which is when scammers choose to hack into solicitors’ email accounts. They will then send you false bank details for your payment.
If your solicitor appears to need or want to change his bank details at the last minute, go to the office in person or at least phone him to check. In any case, a reputable solicitor would not send bank details by email.
Similar to the above, this one involves scammers intercepting your deposit using an email address that looks identical to your solicitor’s. Be extra careful and contact your solicitor before you’re due to make a payment. Or pay a small sum into the account, phone to confirm it has been received by the intended person, then pay the balance.
Students are one of the main groups to suffer fraud. From 2014 to 2018, Action Fraud has said that there were 930 reports of college-related rental fraud, with losses of £1.1m.
You lose your deposit amid false allegations of damage to furniture and leaving your room dirty but you can’t challenge this because your deposit wasn’t lodged in an official scheme. Many renters aren’t aware that the landlord is at fault if he doesn’t protect your deposit when he receives the money.
However, you can challenge this in court and receive up to three times the amount of deposit as compensation.
Or you find a suitable property in a high-demand area of London. But you live far away and being short of time and/or money to view the accommodation, you transfer the deposit and the first month’s rent to the landlord. You arrive in London to find the property was a fake listing, you’ve got nowhere to live and you’ve lost your money.
Make sure to use official channels when paying money and visit the property in person.
While property fraud may not be the most widely reported issue, it’s evident that property cons are the most common type of fraud reported by local authorities in the UK.