Your property is probably the most valuable thing you own and it’s really important to protect it. There is a growing and worrying trend of property fraud around buying and selling property, but by being aware of how property fraud works, you can protect yourself and your property.
What is Property Fraud?
There are several different types of property fraud.
The first is deposit redirection. This is where the fraudster intercepts communication between the buyer and the conveyancer and pretends to be the law firm or conveyancing firm representing them. The fraudster, impersonating the conveyancer, tells the buyer that their bank details have changed and gives them new details of where to pay their deposit. The buyer sends their deposit money to the fraudster’s bank.
By the time they realise they’ve been a victim of fraud, usually because the real conveyancer chases them for the money, the money is already gone and the buyer’s lost their money and their new home.
How Can I Avoid Deposit Redirection?
There are some quick and simple steps you can use to protect yourself from deposit fraud. When you are instructing your property solicitor or conveyancer ask them if their bank details are likely to change before completion. If they tell you they won’t, any email telling you differently will raise your suspicions.
If you do get an email saying that you should pay your deposit into a different bank account, call your conveyancer on their main office number (a number you can verify) and check with them. This should identify any fraudulent email.
One final check you can make is to pay a small deposit of £1 into the bank details you’ve been given and check with your conveyancer that the money has been received. At least if you have been a victim of deposit redirection, you’ve only lost £1 and you’ll know quite quickly that something is wrong.
The second type of property fraud is property hijack. This is where the fraudster steals your identity and sells or mortgages your property whilst pretending to be you. This can be emotionally and financially devastating but you can take steps to protect yourself.
Am I at Risk For Property Fraud?
Some types of property are more at risk than others. If your property falls into one of these categories by being aware of these risks you can take steps to protect your property.
Your property is more at risk from fraud if:
- You rent it out
- It’s empty (you live abroad or in a care home)
- You don’t have a mortgage on it
- It’s not registered with Land Registry
Read the next section to find out what you can do to manage the risks.
What Can I Do To Protect My Property?
Your first step is to make sure your property is registered with Land Registry. It’s been compulsory to register transfers of property and mortgages since 1990, but if your property was purchased before then and not mortgaged or sold since, it’s possible that it’s not registered. If your property is registered and you become a victim of fraud, you could receive compensation, but if it’s not registered you won’t get any compensation. You can carry out a simple search online at the GOV.UK website and then apply for a first registration, prepare all the documents and pay the registration fee, depending on the value of your property.
Once you’ve registered your property, or if your property is already registered, make sure you update your contact details with the Land Registry. You cannot do this online and have to complete a form, but it’s worth taking the time to do this. You can find the form here.
Your next step is to sign up to the Property Alert Service. This free service will help you to make sure your property is not vulnerable to property fraud. All activity on your property will be monitored and you’ll receive an email alert when certain actions are taken on your property, such as someone applying for a mortgage. You can decide if this is suspicious and if so, take advice.
If your property is in one of the high risk groups listed, you may want to add another layer of protection. You can add a restriction to your property so that any activity made on your property is blocked unless a solicitor or conveyancer confirms it was made by you. This is free to do, but only if you do not live in the property you want to protect. Again, this has to be done on paper, not online and you can find the form here.
The steps outlined here are easy ways to make sure your deposit and your home are protected from fraudsters. Make sure you protect yourself and stay one step ahead.
We have strict processes around deposit money here at Meade King. We won’t change our bank details during a transaction and we want you to tell us about any suspicious emails or correspondence you receive. We take property fraud seriously and we’re doing all we can to stand out property fraud.
If you’d like to speak to someone in the property team, call now on 0117 926 4121 or make a Free Online Enquiry.