Property fraud in the UK is increasingly becoming a very serious problem. This problem is causing potentially devastating impacts on individuals and the economy. Different types of fraud and scams include fake identities, multiple properties, complex organised schemes, and individuals falsifying mortgage applications. Let’s discuss the types of property frauds and scams in the United Kingdom that you should be aware of.
Property fraud causes individual loss, destabilises the property market, and decreases trust in the system. These practices and methods of fraud change from time to time. You should take extra cautious measures for anything that seems suspicious and unusual. Find out how to protect property title.
If you are a landlord, a homeowner, or even if you are renting, there are many ways scammers can use to get profit from your property.
Here, we cover the main types of frauds to be aware of and advise on keeping yourself safe from the frauds of property.
Data credit: Ocean Finance.
Beware of the various types of property frauds and scams in the UK
As a property owner, you should protect yourself as much as possible from getting scammed, as there are many ways that your property might be at risk. Make sure to safeguard your property from the following:
If someone owns a property and lives somewhere else, the fake sellers can take advantage of this situation by posing as the owner and pocketing the funds. To achieve this, fraudsters will contact the Land Registry and try to change the details of a registered property. In this way, they will try to transfer control to them if they succeed in it.
That’s why, make sure that the seller has signed up for Property Fraud Alerts from the Land Registry for free.
Friday Afternoon Fraud
Most completions take place on Friday afternoons. Hackers take the opportunity from this to hack into the email accounts of the solicitor. After that, they start to send you fake bank details to send cash to.
If your solicitor at the last-minute changes the detail, you can go to the office in person to check what’s going on. If you cannot afford the time, give them a call to get information.
The fraud method is like the one above, but not entirely the same. In this method, scammers intercept your house deposit by emailing you from a domain like your solicitor. For example, the email of your solicitor might be email@example.com, and the email the hacker sends you would be firstname.lastname@example.org. They look the same, but there will be a slight change in punctuation. It means greater chances are you might mistakenly send your fund to the wrong person.
Take extra attention to the emails and keep in touch with your solicitors every time you are due to make a payment.
Another feasible option is to send a small amount into the account, then confirm the right person has received it, and then pay the rest.
‘Free’ or ‘Cheap’ Land
When someone advertises the land as cheap because of the death of its owner or it being currently unregistered with the Land Registry. These are not the reasons that make the land free or even sellable in the first place.
Before buying it, obtain the title of the land. Otherwise, you would not own it. You should learn how to protect property title.
Get Rich Quick Scheme
If you rent out or invest in land, expecting high returns in a short time, this approach is not right. Before investing in a deal that sounds too good to be true, speak to the local council, visit the property, check if the solicitor is legitimate.
Holiday Home Hustle
If someone advertises the holiday homes as permanent residences, it means it is an attempt to fool potential buyers. In such situations, make sure you are hundred pc certain of the actual status of the property. Check deeds and speak to the current owners before signing anything or any money changes hands.
Some criminals establish fake companies to act as sellers, buyers, conveyancers, or lenders in property transactions. Under the guise of property dealers, they commit massive frauds.
Before dealing with any company, it is the right strategy to check and verify the unique identifying registration number. If the company does not have any number, it means the company is fake, or it is an overseas company. Here, you will need the guidance of a lawyer authorised and based in that country to verify the firm’s identity.
There are many more types of property frauds and scams in the United Kingdom.
It is not just the proprietors and homeowners who need to be aware of scammers-frauds also prevail in rental matters.
There were 18,645 reports of rental fraud in the UK. This figure should have been worrying in the extreme. However, the story does not end here.
During the same period-the Action Fraud reported a loss of £22.1m of the confirmed victims, which was equivalent to £1,396 per person.
Students were among the major hits that include 930 reports of rental fraud related to the university, with losses of £1.1 million.
Here are a few of the most common forms of rental scams you should always be conscious about.
Fake Property Owners
You find a property through Gumtree or SpareRoom in decent condition and at a reasonable price in a highly incredible area of London. But you are doing a job in Scotland and now transferring.
So, you don’t have time to visit the property in person. You directly deposited the first month’s rent to the landlord. Then you arrive in London on the move-in date and find that the listing was fake.
It is good to visit the property in person and avoid over-keen landowners.
Like the ‘Fake Landlords’, but this time fraudsters go even one step further. Fraudsters find an empty property and pretend to be the owner of that land. They will show you the land as if the real owners of that land. But when you go to move in, you find a ghost place.
Use an authentic channel and don’t trust the people who are offering you a cheap deal. Look out for multiple ads and consult local property councillors.
In June 2019, Admin fees were banned, but still letting agents are incorporating fees into their contracts. Tenants do need not to pay admin fees but because many are not aware of it and mistakenly pay for it.
If someone asks for this fee, say ‘no’ to them, and tell them about the new ban. Or if someone charged you in the wrong way, you have the option to complain to the trading standards.
The property owner asks a friend to show interest in the property by attending an open/group viewing. The friend shows too much interest and acts as a fake renter to overestimate the worth of the property. You also want that property, so the landowner demands a higher deposit fee than on the listing to make sure you get the property. Therefore, you should remain alert and on the lookout for fake house buyers UK.
Holding fees and deposits are fees now capped, that’s why don’t pay more than the legal amount.
Cash Payment Scam
Sometimes a problem arises because of paying rent or deposit in cash. You pay your landlord a rent in cash who later outrightly denies receiving it.
It is not illegal to pay in cash but always make sure to receive the receipt. Make sure to avoid all these types of property frauds and scams in the United Kingdom.
Which Properties are at the Most Risk of Fraud?
Some properties are the most attractive to fraudsters that include:
Rental Property: This property is easier for fraudsters to target, as the owner is not present.
Vacant Building: If the owner of the property has passed away or moved into a care house and there are no tenants. Then there are greater chances that fraudsters will try to target that property.
Owner Is Abroad: It is harder for the owner to keep track of the property from overseas.
High Value: It is no denying that the worthier the property, the more the scammer. Unguarded High-value property most likely becomes the target of fraudsters.
Mortgage Free: mortgage serves as an additional check on the property. In the absence of a mortgage, it becomes easier for fraudsters to transfer the deed to a property that is owned outright.
One Contact Address: if the property is in question and the name on the land registry file is not the current residence of the owner, then there are chances of fraud.
Consider the above-mentioned categories so you can protect your home from all types of property frauds and scams in the United Kingdom.
What is the best strategy to prevent yourself or your property from fraud and scam?
To avoid the property from scams and fraud, the HomeOwners Alliance suggests:
“If you own a property that is at risk (no mortgage, you live elsewhere), we think the free Land Registry Property Alert Service is great. You will get an email alert if there is any activity occurring. But be aware that you also need to get in touch with the Land Registry if you note any unusual activity.
For more reassurance, you may want to put a restriction on the title deed of your property. This stops the Land Registry from registering a sale or mortgage unless a conveyancer certifies the application was made by you.”