The real life horror behind the drama - why we must be on our guard against fraud

In a new column, solicitor Colum Smith, an expert in combating fraud at Taylor Rose MW Solicitors, explains why those looking to capitalise on this year’s booming housing market need to be on their guard. 

Like millions of TV viewers, I’ve enjoyed watching ITV’s new prime-time drama, Our House. 

The series tells the story of a woman who comes home to find someone has moved into her house without permission. 

Yet unlike others, who will have watched this programme safe in the knowledge it’s simply a work of fiction, the reality is very different. 

That’s because the truth is property fraud is rising - and everyone in our sector needs to be on red-alert to the dangers. 

Latest figures from the Office of National Statistics reveal soaring numbers of people fell victim to cons last year. We are noticing that 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 only 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 instead that you take proactive steps to protect yourself from these scammers.

The Land Registry was forced to pay out £3.5 million 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 £115 million since 2016.

Email and IT systems (especially those of conveyancers) are being attacked continuously. Fake emails can now be very hard to spot, and people may find themselves caught out especially when under the stress of buying a home.

The most common type involve fraudsters pretending to be buyers. 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 so much information related to 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 is that lots can be done to prevent it. Start by always asking plenty of questions to make sure that the seller is genuine. 

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.

There is also a lot that we, as solicitors, can be doing in this area to better protect buyers and sellers. 

When acting for a seller, any good solicitor should ensure that they have sufficient evidence to show that the property belongs to their client and if the property is not the client’s primary residence they will want to see evidence of the seller’s connection to the property. 

When acting for a buyer, the solicitor should ask the seller’s solicitor to confirm that they have adequately verified their client’s ID and that they are satisfied that their client is legally entitled to sell the property. 

Communication is key to preventing fraud. When you come to sell or buy a property you should ensure that you are regularly corresponding with all parties involved not only via email, but face to face and over the phone. This includes your solicitor, estate agent, financial advisor and the related seller or buyer. 

If you are a buyer and feel that the seller is putting you under constant pressure to exchange and complete quickly, or refusing you access to the property then communicate this with the estate agent and your solicitor to seek advice. Do not allow yourself to be pressurised into a situation you are not comfortable with and insist on viewing any property more than once. 

It is clear that despite tighter procedures and rules and regulations, the rise in property fraud is not showing signs of slowing down, so all parties involved need to be vigilant and work together to prevent property fraud.

*Colum Smith is Chief Vision Officer at law firm Taylor Rose MW